Question

Group Sky Corporation has 6.5 percent coupon bonds on the market with 15 years to maturity. The bonds make semiannual payments and currently sell for 102 percent of par. What is the current yield

Answer 1

The current yield is 6.37255%

Step-by-step explanation:

In order to calculate the current yield we would have to make the following calculation:

Current yield=coupon bonds percentage*100/percentage amount of sale

According to the given data w have the following:

coupon bonds percentage=6.5 percent coupon bonds on the market

percentage amount of sale=currently sell for 102 percent of par

Therefore, Current yield=6.5%*100/102

Current yield=6.37255%

The current yield is 6.37255%