Capital Gains Yield Calculator + Formula

Enter the initial stock price and the stock price after the 1st period into the calculator to determine the capital gains yield.

Capital Gains Yield Formula

The following equation can be used to calculate the capital gains yield of a security.

CGY = (Pf - Pi) / Pi *100

Where CGY is the capital gains yield (%)
Pi is the initial stock price
Pf is the final stock price

Capital Gains Yield Definition

Capital gains yield refers to the percentage increase in the value of an investment over a specific period, typically expressed as a ratio of the change in price to the initial investment. It is an important metric used by investors to assess the profitability of their investments without explicitly stating its importance.

Capital gains yield plays a significant role in investment analysis as it provides a clear indication of the potential return on investment.

By evaluating the change in value of an asset over time, investors can gauge the performance and profitability of their portfolio.

Higher capital gains yield implies a greater appreciation in the investment’s value, indicating a successful investment decision.

By monitoring the capital gains yield of various investments, individuals can identify assets consistently demonstrating positive growth potential. This enables them to allocate their resources towards assets that offer higher returns and divest from underperforming investments.

Capital gains yield also assists investors in comparing the performance of different investment opportunities. This analysis aids in decision-making, allowing investors to prioritize investments historically, and providing greater profitability.

Capital Gains Yield Example

How to calculate capital gains yield?

First, determine the initial stock price.
Calculate the initial price of the stock.
Next, determine the final stock price.
Calculate the final price of the stock after some time period.
Finally, calculate the capital gains yield.
Calculate the capital gains yield using the equation above.

FAQ

What is a capital gains yield?

A capital gains yield is the change in the price of a stock or security. It’s a measure of the total gain a particular stock undergoes during a specific period.

What is a normal capital gains yield?

The average market return over time has been roughly 7-10% per year. Any capital gains that exceed this value are considered a success.