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Saving & Investing

Yield on Cost

Also called: YOC, yield on original cost

Yield on cost is the current dividend divided by what you originally paid, not by today's price. A stock bought at $20 now paying $2 has a 10% yield on cost even if the current yield is 2.5%. It's a satisfying number and a misleading one for decisions: the money you could free by selling is today's market value, so today's yield is the relevant comparison against alternatives.

Formula

Yield on cost = Current annual dividend ÷ Original purchase price

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