Adjusted current yield

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The adjusted current yield is a financial term used in reference to bonds and other fixed-interest securities. It is closely related to the concept of current yield.

The adjusted current yield is given by the current yield with addition of ${\displaystyle {\frac {({\text{Face value}}-{\text{Clean price}})/{\text{Years to maturity}}}{\text{Clean price}}}*100\%.}$

Here Face value is the face value of the bond, and Clean price is the clean price of the bond (i.e. present value of the bond with accrued interest subtracted).

Video Adjusted current yield

Formula for adjusted current yield

In total the adjusted current yield is given by ${\displaystyle {\frac {\text{Annual coupon payments}}{\text{Clean price}}}*100\%+{\frac {({\text{Face value}}-{\text{Clean price}})/{\text{Years to maturity}}}{\text{Clean price}}}*100\%.}$

Maps Adjusted current yield

References

Source of the article : Wikipedia