Answer:
current yield = 6.13%
Step-by-step explanation:
Given:
The software has 5.7 percent coupon bonds
maturity=11 years
current sell=93 percent of par
The objective is to find the current yield on the bonds
Formula used:
Current yield =
Solution:
Current selling price=93% of 1000=930
Annual coupon payment= 5.7% of 1000=57
Then,
On substituting the values in the formula,
Current yield =
*100
On Simplifying,
Current yield =6.13%
Therefore,
Current yield =6.13%