Ask Question
10 May, 13:20

A Puppy Pet Services $1,000 bond has a 7.5 percent coupon rate, matures in 2016, and is currently quoted at $820. The current yield is:A. 6.15 percent. B. 7.50 percent. C. 9.15 percent. D. 10.27 percent. E. 11.43 percent.

+3
Answers (1)
  1. 10 May, 13:47
    0
    Option (C) is correct.

    Explanation:

    Face Value = $1,000

    Current Price = $820

    Annual Coupon Rate = 7.50%

    Annual Coupon = Annual Coupon Rate * Face Value

    = 7.50% * $1,000

    = $75

    Current Yield = Annual Coupon : Current Price

    = $75 / $820

    = 0.0915 or 9.15%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A Puppy Pet Services $1,000 bond has a 7.5 percent coupon rate, matures in 2016, and is currently quoted at $820. The current yield is:A. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers