Current yield
The annual coupon divided by the purchase price: what the bond pays in coupon against the money put into it.
Formula
The denominator is the price without accrued interest. The difference between purchase price and par does not enter the calculation at all — that is both the weakness of the measure and its appeal.
How to read the number
It answers a question about the present cash flow and says nothing about what happens at redemption.
When the metric lies
Also known as: running yield, income yield