Definition – What is Capital Gains Yield?
Capital Gains Yield is the change in the price of an investment. It is listed as a percentage.
Formula – How to calculate Capital Gains Yield
Capital Gains Yield = ((Current Price – Original Price)/Original Price) x 100%
An investment’s original price was $5,000 and is now worth $7,000.
Capital Gains Yield = (($7,000 – $5,000) / $5,000) x 100% = ($2,000 / $5,000) x 100% = 0.4 x 100% = 40%
Therefore, this investment’s capital gains yield is 40%.
Sources and more resources
- Accounting Tools – Capital gains yield – A short explanation of capital gains yield.
- Corporate Finance Institute – Capital Gains Yield – Some examples and an explanation of capital gains yield.
- Investopedia – Capital Gains Yield – Breaks down the concept of capital gains yield.
- Finance Formulas – Capital Gains Yield – The formula for capital gains yield.