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Yield on Cost (YoC) & Dividend Aristocrat Compounding Calculator Formula Breakdown
The actual dollar price paid per share when the investment position was originally initiated.
Current annualized recurring dividend distribution per share.
Current dividend divided by current market price (what a new investor receives today).
Projected yield on original cost after t years of annual dividend raises: [ Dโ ร (1 + g)แต / Cost Basis ] ร 100.
How to Calculate Yield on Cost Calculator Step-by-Step
Input your original share purchase price (or simulate an early investment entry point).
Retrieve current annual regular dividend per share.
Calculate current Yield on Cost % = (Dividend / Original Price) ร 100.
Compare Yield on Cost against current market yield to measure dividend expansion.
Model 5, 10, 15, and 20-year forward cash flows at sustainable dividend growth rates.
How to Interpret the Result
Frequently Asked Questions
What is Yield on Cost (YoC)?
Yield on Cost measures dividend yield based on the initial price you paid for shares, rather than the current trading price. It illustrates how dividend growth compounds personal income over holding periods.
What is Warren Buffett's Yield on Cost for Coca-Cola?
Berkshire Hathaway paid approximately $1.3B for 400M shares of KO ($3.25/share split-adjusted) in the late 1980s. With KO paying over $1.90/share today, Buffett's Yield on Cost exceeds 54% annually on original cost.
Can Yield on Cost be misleading?
YoC reflects past compounding success, but it should not prevent an investor from selling if the underlying business deteriorates or if capital could earn higher returns elsewhere.
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