DEFINITION of 'CashOnCash Yield'
A basic calculation to estimate the return from an asset that generates income. Cashoncash yield also refers to the total amount of distributions paid annually by an income trust as a percentage of its current price. The cashoncash yield is a measurement technique that can be used to compare different unit trusts.
INVESTOPEDIA EXPLAINS 'CashOnCash Yield'
The cashoncash yield is useful as an initial estimate of the return from an investment, but has a number of limitations. It may overstate yield if part of the distribution consists of a "return of capital," rather than a "return on capital," as is often the case with income trusts. Also, as a pretax measure of return, it does not take taxes into consideration. For example, if an apartment priced at $200,000 generates monthly rental income of $1,000, the cashoncash yield on an annualized basis would be 6%.
In the context of income trusts, assume a trust with a current market price of $20 pays out $2 in annual distributions, consisting of $1.50 in income and 50 cents in return of capital. The cashoncash yield in this case is 10%, but since part of the distribution consists of return of capital, the true yield is 7.5%. The cashoncash yield measure overstates the return in this case.

Pretax Rate Of Return
The rate of return on an investment that does not take the taxes ... 
Return On Invested Capital  ROIC
A calculation used to assess a company's efficiency at allocating ... 
Income Trust
An investment trust that holds incomeproducing assets and trades ... 
Yield
The income return on an investment. This refers to the interest ... 
Return Of Capital
A return from an investment that is not considered income. The ... 
Canadian Income Trust
A type of corporate structure as designated by the Canada Revenue ...
 No results found.

Bonds & Fixed Income
Junk Bonds: Everything You Need To Know
Don't be fooled by the name  junk bonds may be for you if you know how to analyze them. 
Taxes
The Basics Of REIT Taxation
The unique tax advantages offered by these investments can translate into superior yields. 
Options & Futures
Find Quality Investments With ROIC
Return on invested capital is a great way to measure the true value produced by a company. Learn to use the ROIC metric and increase your chances of finding successful investments. 
Forex Education
How To Compare Yields On Different Bonds
Find out how to equalize and compare fixedincome investments with different yield conventions. 
Taxes
Weighing The Tax Benefits Of Municipal Securities
Find out how to determine whether the tax exemption offered by "munis" benefits you. 
Investing Basics
Interest Rates And Your Bond Investments
By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it. 
Options & Futures
Handling HighYield Savings Accounts
Is this the savings route for you? Read on to find out what these accounts have to offer. 
Investing Basics
Understanding Risk Averse Investing
Risk averse describes a low level of risk an investor is willing to accept on his investments. An investor who is risk averse prefers little risk and is willing to accept a lower return because ... 
Investing Basics
What is Profit?
Profit is a general term used to denote when earnings exceed the expenses incurred to generate those earnings. 
Investing Basics
What's a ClosedEnd Fund?
A closedend fund is a mutual fund that has an initial offering (IPO) of shares, and once those shares are sold, no additional shares are issued. Since it is a public offering, closedend funds ...