Investing
Current yield
Annual coupon income divided by the price paid.
The Formula
CY = coupon / price
Annual coupon income divided by the price paid.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| C | Annual coupon | currency | Interest paid each year. |
| P | Price paid | currency | What you paid for the bond. |
What Each Symbol Means
Ccurrency
Annual coupon
Interest paid each year.
Pcurrency
Price paid
What you paid for the bond.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate bond yield page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Bond Yield, filed under Finance. Every number the guide produces comes from substituting into this one line.