What is ‘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.
Explaining ‘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.
Further Reading
- The yield curve as a predictor of US recessions – papers.ssrn.com [PDF]
- The US Treasury yield curve: 1961 to the present – www.sciencedirect.com [PDF]
- The economics of structured finance – www.aeaweb.org [PDF]
- Do small banks have an advantage in lending? An examination of risk-adjusted yields on business loans at large and small banks – link.springer.com [PDF]
- Small bank comparative advantages in alleviating financial constraints and providing liquidity insurance over time – academic.oup.com [PDF]
- Some lessons from the yield curve – www.aeaweb.org [PDF]
- Measuring systematic risk in EMU government yield spreads – academic.oup.com [PDF]
- Yield effects of genetically modified crops in developing countries – science.sciencemag.org [PDF]
- The emergent knowledge‐based theory of competitive advantage: an evolutionary approach to integrating economics and management – onlinelibrary.wiley.com [PDF]
