- The income return on an investment, including the interest or dividends received from a security, over a certain period of time. Yield is not the same thing as total return on investment.
To calculate total return, you add the amount of increase in the share price to dividends paid on each share (if any), then you divide that number by the original stock price. Yield doesn’t account for the increase in share price. Rather, it is calculated by dividing the net realized return by the principal amount.
There are numerous types of yield calculations, each of which focuses on a slightly different metric. Examples include cost yield, current yield and nominal yield, just to name a few.
- Transportation: The most ignored traffic sign in the United States. It is often viewed as a suggestion rather than a command.
Mom: “If I invest in your startup, what kind of yield can I expect from my shares over the first five years?”
Adult Son: “… Gratitude?”