Yield

The income earned in a particular time period from an investment is usually expressed as a percentage of money invested, this is called the yield. A given investment can have a variety of yields because of the many methods used to measure yield. In case of stocks, yield is the dividend received per share divided by the stock’s price per share. For bonds, it is called as yield to maturity and is calculated as the coupon received divided by the price paid.  

Example

If you pay $950 for a bond with a par value of $1000 that pays a coupon of 6% p.a., or $60 a year.

Yield = $60/ $950 = 0.0631 = 6.3%

But if you paid $1000 for the same bond,

Yield =  $60/ $1000 = 0.06 = 6.0%