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Malko Enterprises’ bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield?
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Malko Enterprises’ bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield?

User Nadeem Khan
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1 Answer

2 votes

Answer:

Current yield = 7.14%

Step-by-step explanation:

As we know that: current yield = Annual coupon payment/Current market price of bond

= 75/1050

= 7.14%

this rate represents for an investor would expect to earn because face vale and market price of bonds differs so the investor much rely on that factor.

User Or Betzalel
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3.6k points
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