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18 October, 13:22

A bond that pays interest semiannually has a price of $975.11 and a semiannual coupon payment of $28.25. If the par value is $1,000, what is the current yield

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  1. 18 October, 13:31
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    5.79%

    Explanation:

    For the computation of current yield first we need to find the annual coupon is shown below:-

    Annual Coupon = Coupon payment * Semi annual

    = $28.25 * 2

    = $56.5

    Current Yield = Annual Coupon : Market Price

    = $56.5 : $975.11

    = 0.0579

    or

    = 5.79%

    Therefore for computing the current yield we simply applied the above formula so that the correct rate could come
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Home » Business » A bond that pays interest semiannually has a price of $975.11 and a semiannual coupon payment of $28.25. If the par value is $1,000, what is the current yield
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