When investing, youll want to understand the annual yield (or return, as in what you earn off of it) of whatever youre investing in. To understand this, youll need to take a look at the daily dividend factor, which is a quote of that bonds daily yield. Its like a mini snapshot of the annual yield you can expect to earn.
Example: How do you calculate the daily dividend factor? If youre looking to invest in a corporate bond, for example, youd take the interest of that bond and divide it by the market price. Thats your annual percentage yield. Now, divide that (remember to convert it to a number, dont use the percentage) by 365. Thats the daily dividend factor!