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Disney has a bond issue outstanding with an annual coupon rate of 9%. The par value...

Disney has a bond issue outstanding with an annual coupon rate of 9%. The par value of the bond is $1,000. Calculate the current yield of the bond if the bond’s current price was $974.

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Answer #1

Current yield:

= Annual coupon payments÷Bond price

= $90/$974

= 9.24%

Hence, current yield is 9.24%

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