The capital gains yield or CGY is the rise in the price of a security. The CGY is the rise in the stock price divided by the original price of the security, for common stock holdings.
Formula
CGY = (P1 - P0) / P0
Where:-
P0 = price of the stock when we invested into it
P1 = price of the stock after the first period
Example
Mr. X bought the stock, for $105. Now, after 2 years, the price of the stock has appreciated to $120 per share.
According to the formula, Capital Gains Yield is:-
= ($120 – $105) / $105
= 14.29%
Created: Jun 4, 2018
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