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What is the current yield for a $1,000 corporate bond that pays 9 percent and has a current market value of $818
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What is the current yield for a $1,000 corporate bond that pays 9 percent and has a current market value of $818

User Fracu
by
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1 Answer

2 votes

Answer:

The current yield is 11%

Step-by-step explanation:

The computation of the current yield is shown below:

Current yield is

= Annual coupon ÷ Bond price

where,

Annual coupon is

= 0.09 × $1,000

= $90

And, the price of the bond is $818

So, the current yield is

= $90 ÷ $818

= 11%

Hence, the current yield is 11%

We simply applied the above formula so that the current yield could come

User Alxcyl
by
5.1k points
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