Glossary · E
Effective yield
The annual dividend as a percentage of the price actually paid for a preferred share. If a share trades below its $100 stated amount, the effective yield is higher than the stated dividend rate.
Revised 22 October 2026 · Suggest a correction
Effective yield shows what a preferred share's dividend is worth compared with its market price instead of its $100 stated amount. This site works it out as:
effective yield = stated rate × par ÷ price
If the price is below par, the effective yield is higher than the stated rate. If the price is above par, it is lower.
Worked example: STRC
On 21 August 2026, STRC closed at $96.18 with a 12.00% stated rate. Strategy's own briefing gives the effective yield as $12 ÷ $96.18 = 12.48% (FWP, 24 August 2026). Strategy uses the same formula, defining effective yield as the annualised yield "based on its fixed dividend rate or its current dividend rate … and the current price".
Worked example: SATS at issue
Strive priced SATS on 15 October 2026 at $90 per share with a fixed 15.00% rate on $100 (424B5, 16 October 2026). At the $90 issue price: 15% × 100 ÷ 90 = 16.67%. That is arithmetic at the issue price only. It is not a yield at any later date.
What it does not capture
- Rate changes. For variable-rate series (STRC, SATA) the rate can be reset monthly, so today's effective yield is a snapshot.
- Gains or losses on price. A share bought below par and later redeemed or sold near par produces a return that effective yield leaves out. See yield to call.
- Tax and FX. UK holders face withholding tax and currency movement on USD dividends.
- Payment risk. Dividends must be declared by the issuer's board. Non-cumulative series such as STRD do not accrue unpaid amounts.
Every effective yield on 21DC gives the closing price and date it is based on.
What to check in the filing
- The current declared rate and the period it applies to
- Whether the rate is fixed or can be reset