A return rate on a fixed-income security or a share of stock as related to the current market price. In other words, it refers to the percentage of a coupon or dividend rate to the current price of a corresponding instrument.
For fixed rate bonds, it is the same as current yield:
Indicated yield = current yield = coupon rate/ bond’s current price
For common stocks, it is the annual indicated yield divided by the market price:
Indicated yield = annual indicated yield/ stock’s current price
For preferred stocks, it is the contractual dividend divided by the market price:
Indicated yield = contractual dividend/ preferred stock’s current price
