# Yield on Cost

*Saving & Investing — Finicade finance glossary*

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`

**Also known as:** YOC, yield on original cost

**Related terms:** [Dividend Yield](https://finicade.com/glossary/dividend-yield), [Cost Basis](https://finicade.com/glossary/cost-basis), [Dividend](https://finicade.com/glossary/dividend), [Total Return](https://finicade.com/glossary/total-return), [Dividend Aristocrat](https://finicade.com/glossary/dividend-aristocrat)

Source: https://finicade.com/glossary/yield-on-cost