2006-08-01 03:10:38 · 8 answers · asked by krystyna m 1 in Business & Finance ➔ Investing
The annual gain expressed as an percentage, dividend and interest included
2006-08-01 03:16:26 · answer #1 · answered by cordefr 7 · 1⤊ 2⤋
The yield is the return on the investment expressed as a percentage of the investment. For shares, this is calculated as the dividend per share divided by the share price.
Example: Widgets plc is currently trading at £5.00 per share. It pays a dividend annually and it's most recent dividend was 45p per share. The yield is therefore 45/500 = 9%. Note that the dividend amount only changes once per year (in this example) but the share price can change every day. If tomorrow Widgets plc shares drop to £4.50, the yield will be 45/450 = 10%. Note too that the yield is based on the PAST dividends - it doesn't mean that the next dividend will be the same!
2006-08-01 03:26:55 · answer #2 · answered by Graham I 6 · 0⤊ 0⤋
The yield of a financial investment is the rate of return, expressed as a percentage. It's the interest or dividend payable on a security, expressed as a percentage of the price of the security. Some investment advisors also include capital gain as part of the yield.
There are different types of yield too - this may help:-
http://www.investopedia.com/terms/y/
2006-08-01 03:16:32 · answer #3 · answered by Quester 4 · 0⤊ 0⤋
Before this parameter of investment performance will be understood, I have to explain two things:
1. Simple Interest.
Amount of money earned on investment (as a % of initial deposit) during the year. Ex.: $100 deposit, 8% simple interest, earn $8 per year for a total balance $108.
2. Compound interest.
For the same year if compounded monthly (12 compounding periods per year) the same $100 investment earn for the:
first month $100X(0.08:12)= 0.0533, for a total amount $100.053
second month $100.053X(0.08:12)=0.667, for a total amount $100.72, and so on. You can figure out that it will be slightly bigger amount than simple interest will earn.
Now,
3. Yield is a SIMPLE interest that could earn the same amount per year as COMPOUND interest would. This number will allow you to compare different investment vehicles.
2006-08-01 03:43:24 · answer #4 · answered by Thinker 4 · 0⤊ 0⤋
It can either be a percentage or a dollar amount, but it is the amount of money you make, or yield, on an investment.
2006-08-01 03:15:16 · answer #5 · answered by jim 6 · 0⤊ 0⤋
Usually people ask this about CDs, and in that, yield is the percentage return you get if you leave your money and the interest it is earning in the CD. If you are withdrawing the interest as it is earned, then the yearly return will be less than the potential yearly yeild.
2006-08-01 03:14:50 · answer #6 · answered by Rjmail 5 · 0⤊ 0⤋
Isn't it the money you make from the investment?
2006-08-01 03:14:33 · answer #7 · answered by Stephen H 4 · 0⤊ 0⤋
It is basically the interest or your "return of investment."
2006-08-01 03:16:41 · answer #8 · answered by MenudoPie 3 · 0⤊ 0⤋