When investing, youÂ’ll want to understand the annual yield (or return, as in what you earn off of it) of whatever youÂ’re investing in. To understand this, youÂ’ll need to take a look at the daily dividend factor, which is a quote of that bondÂ’s daily yield. ItÂ’s like a mini snapshot of the annual yield you can expect to earn.
Example: How do you calculate the daily dividend factor? If youÂ’re looking to invest in a corporate bond, for example, youÂ’d take the interest of that bond and divide it by the market price. ThatÂ’s your annual percentage yield. Now, divide that (remember to convert it to a number, donÂ’t use the percentage) by 365. ThatÂ’s the daily dividend factor!
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