Question

Bonds of Francesca Corporation with a par value of $1,000 sell for $930, mature in five years, and have a 8% annual coupon rate paid semiannually. Do not round intermediate calculations. Round your answers to two decimal places. Calculate:

Answer 1

Current yield = 8.60%

Step-by-step explanation:

Missing question "Calculate the current yield annually"

Current yield = Annual Coupon / Current Price

Annual Coupon = C%*Par = 8%*1000 = $80

Current yield = $80 / $930

Current yield = 0.086022

Current yield = 8.60%