Yield on Cost Calculator
Long-term dividend yield.
Calculate yield on cost showing dividend power for long-term holders — current dividend as a percentage of what you originally paid, not current price.
What this tool does
Yield on cost shows what return a long-term holder is actually earning on their original investment, expressed as a percentage. It divides the current annual dividend by the original purchase price, illustrating how dividend income has grown relative to the initial amount paid. The result is most sensitive to changes in current dividend amount—as payouts increase over time, yield on cost rises, even if the share price stays flat. This calculation is useful for tracking income generation on holdings accumulated years ago. The calculator assumes dividend payments remain at current levels and does not account for taxes, fees, reinvestment effects, or changes in share price. Results are presented for educational illustration only.
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Formula Used
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Calculations or display — let us know.
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Yield on Cost (YoC) calculator measures dividend income vs original purchase price - showing the power of dividend growth investing. Bought stock at 20, now pays 2 dividend = 10% YoC. Compare to current yield (2/current price) - YoC almost always higher for long-term holders. Coca-Cola long-term holders: 50%+ YoC after 30 years.
Example: bought 1,000 shares at 20 in 2010 (cost 20,000). Today company pays 2 annual dividend per share. Annual dividend income: 2,000. Yield on Cost = 2,000 / 20,000 = 10%. Even if current share price is 50 (current yield = 2/50 = 4%), YoC remains 10% based on what you actually paid. Power of dividend growth + holding period.
Famous YoC examples: Warren Buffett's 1988 Coca-Cola purchase: cost basis ~3.25/share. Coca-Cola now pays ~1.60 dividend = 49% YoC. Same Buffett's Express 1991 purchase: ~50% YoC today. Long-term dividend growth investors achieve 20-50% YoC after 20-30 years - most retail investors Holding long enough to enjoy this. Patience compounds - dividend aristocrats (25+ years of dividend increases) deliver life-changing YoC for early holders.
Quick example
With current annual dividend of 2,000 and original cost basis of 20,000, the result is 10.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Current Annual Dividend and Original Cost Basis.
What's happening under the hood
Yield on cost = annual dividend / original cost basis × 100. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Using this well
What this doesn't capture
Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. The number represents one scenario rather than a forecast.
££2,000 dividend / ££20,000 cost = 10.00%.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes yield on cost by dividing the current annual dividend per share by the original purchase price per share, then multiplying by 100 to express the result as a percentage. This metric measures the income return generated on your initial investment, based on the dividend paid today relative to what you paid at purchase. The calculation assumes a constant dividend amount and treats the original cost basis as fixed; it does not account for dividend growth over time, price appreciation or depreciation of the underlying holding, transaction fees, tax on dividend income, or reinvestment of dividends. Yield on cost is commonly used to evaluate income-generating investments relative to their entry price.
References
Frequently Asked Questions
YoC vs current yield?
Why YoC matters?
Dividend reinvestment impact?
Famous YoC examples?
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