Yield Advantage
 |
Definition of 'Yield Advantage'The relationship between convertible securities and the dividend yield of the common stock of the same issuing corporation. The yield advantage is the additional amount of return an investor can expect to earn if a convertible security is purchased instead of the common stock. |
 |
Investopedia explains 'Yield Advantage'The yield advantage is calculated by subtracting the dividend yield of common stock from the rate of return on a convertible security. Determining this calculation helps investors decide if it is advantageous to retain the convertible security or exchange it for common stock. |
Related Definitions
Articles Of Interest
-
A Primer On Preferred Stocks
Offering both income and relative security, these uncommon shares may work for you. -
Introduction To Convertible Preferred Shares
These securities offer an answer for investors who want the profit potential of stocks but not the risk. -
What is the difference between preferred stock and common stock?
Preferred and common stocks are different in two key aspects. First, preferred stockholders have a greater claim to a company's assets and earnings. This is true during the good times when the ... -
Why do some preferred stocks have a higher yield than common stocks?
Before we answer this question, let's just take a quick review of what a stock's yield is actually measuring.The yield is calculated by taking the stock's annual expected dividend and then dividing ... -
How Risk Free Is The Risk-Free Rate Of Return?
This rate is rarely questioned - unless the economy falls into disarray. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. -
Equity Valuation: The Comparables Approach
The main purpose of equity valuation is to estimate a value for a firm or security. There are three primary equity valuation models: the discounted cash flow (DCF), cost and comparable approaches. ... -
The Copper King: An Empire Built On Manipulation
Find out how Yasuo Hamanaka's actions in the copper market forever changed the rules for commodity traders. -
7 Controversial Investing Theories
We take a closer look at the theories that attempt to explain and influence the market.
Free Annual Reports