For bond selling for $640, with a par value of $1,000 and a coupon rate of...

Question

Question

For bond selling for $640, with a par value of $1,000 and a coupon rate of 17.03 percent, the current yield is

business finance

Answer 1

Answer #1

Annual coupon=$1000*17.03%=$170.3

Hence current yield=Annual coupon/Current price

=(170.3/640)

which is equal to

=26.61%(Approx).

Answer 2

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