About Yield On Cost Calculator (Formula)
A Yield on Cost Calculator is a financial tool used to determine the yield or return on an investment based on its original cost or initial investment amount. The Yield on Cost (YOC) is a useful metric for investors to assess the income generated by their investments relative to the original amount invested. It is particularly beneficial for long-term investors who want to track the income growth of their investments over time. The formula used to calculate the Yield on Cost is:
Yield on Cost (YOC) = (Annual Dividend Income / Original Cost of Investment) × 100
Where:
- Yield on Cost (YOC) represents the percentage return on the original investment based on the annual dividend income received.
- Annual Dividend Income is the total annual income or dividends received from the investment.
- Original Cost of Investment is the initial amount of money invested in the asset or security.
The Yield on Cost provides a clear picture of how the income generated by an investment has changed over time, taking into account the effect of dividend growth or changes in the investment’s value.
Using the Yield on Cost Calculator involves these steps:
- Input: Enter the annual dividend income received from the investment and the original cost of the investment into the calculator.
- Calculation: The calculator applies the formula to calculate the Yield on Cost as a percentage.
- Output: The calculator displays the calculated Yield on Cost (YOC).
This tool is particularly useful for income-focused investors who seek to evaluate the income growth of their investments and make informed decisions about portfolio management.
In the realm of finance and investment analysis, the Yield on Cost is a valuable metric for measuring the income generated by an investment relative to its initial cost.