Definition
Current bond yield compares the annual coupon amount with a selected market price. In a simple calculation, divide annual coupons by the price and express the result as a percentage. The measure shows what share of the price is represented by the current coupon flow, but it does not describe the whole holding result.
Example
If annual coupons are hypothetically 80 roubles and the purchase price without additional components is 800 roubles, current yield is 10%. The nominal may differ from the price. The calculation does not automatically include accrued coupon income, commissions or coupon-change terms.
Limitations
Do not confuse current yield with the coupon rate or yield to maturity. It does not account for capital appreciation or loss at maturity or the timing of payments. For a floating-coupon bond, the future amount is also unknown in advance. Comparing bonds only by this coefficient without considering term and credit risk is insufficient.