Finance glossary
Current Yield
Definition
A bond annual coupon divided by its current market price.
Current yield measures the income return on a bond at its present price, ignoring capital gains or losses at maturity. It is higher than the coupon rate when a bond trades at a discount and lower when it trades at a premium. It is simpler but less complete than yield to maturity.
In a sentence
Bought at a discount, the bond's current yield was higher than its stated coupon rate.
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