Running yield (in case of bonds known also as yield to maturity, YTM) is a measure that divides investment annual income (dividend) by its current market value. Running yield is important for long-term investors who keep stocks or bonds for a long time.
Some investors prefer dividend yield, but that indicator is limited to individual assets, while running yield measures whole portfolio. Ii is convenient method for quick assessment of need to change portfolio configuration.
The running yield is different from nominal yield, as the latter takes into account nominal price. The two will be the same only if market value is equal nominal value.
- Ahmed, H., & Javid, A. Y. (2008). Dynamics and determinants of dividend policy in Pakistan (evidence from Karachi stock exchange non-financial listed firms).
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