# Yield

1.

The rate of return (or cost) *on the current market value* of an asset (or liability), usually expressed as a percentage per annum.

For example, today’s yield to maturity of a bond measures the total return to an investor in the bond, reflecting both

- The interest income over the remaining life of the bond and

- Any capital gain (or loss) from today’s market value to the redemption amount payable at maturity.

When the market yield to maturity is applied to discount the future cashflows of the asset or liability, the net present value of all of the cashflows - including the current market purchase price - is Nil.

2.

Dividend yield.

3.

More broadly, any measure of a rate of return or borrowing cost.

In this broader sense, yield may be calculated and expressed on a number of different bases.

For this reason, it is essential to identify clearly the basis on which a given yield is expressed, before using it for calculation or comparison.

4.

Tax yield.

## See also

- Bond
- Credit spread
- Discount instruments
- Discount rate
- Discount yield
- Dividend yield
- Forward yield
- High-yield
- Interest
- Interest rate
- Liquidity
- Market value
- Nominal annual rate
- Nominal annual yield
- Par yield
- Periodic rate of interest
- Periodic yield
- Rate of return
- Security
- SLY
- Sterling commercial paper
- Tax yield
- Yield spread
- Yield to maturity
- Zero coupon yield