Current yield
By Jude Wallis
Current yield is a bond's annual coupon, in cash, divided by the price paid for it. It measures the income arriving this year and stops there.
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The top of the fraction is money, not a rate. A coupon rate is a percentage of face value; the coupon itself is the cash that percentage produces. If the bond pays twice a year, both payments belong on top. Halving that number by accident halves the yield and the mistake looks entirely reasonable on the page.
The bottom is the price, which is the only part that moves. Because a fixed coupon is divided by a changing price, a bond whose price falls carries a higher current yield for the next buyer without anything about the bond changing.
What current yield never sees is redemption. A bond bought at a discount hands back face value at maturity and that gain is missing from the figure; yield to maturity is the number that includes it. The current yield calculator is the quotient, and how current yield works is the explainer.