Minimum Yield
Categories: Bonds
Minimum yield (or required yield, as it's often called) represents the lowest possible return a bond can offer and still be considered a valid investment. It's like if you were to say, "I only date sevens or above." Your minimum dating yield would be seven. (But who are we kidding? We've seen you with several fours.)
The minimum yield isn't something set by statute, or by some corporate policy. It's a market comparison thing. It changes as the conditions of the market change.
Fundamentally, the minimum yield is the lowest possible payout that investors will accept to take on the risk of a particular bond. Bonds with yields set lower than that...just won't sell.