contestada

A coupon bond pays annual interest, has a par value of $1,000, matures in four years, has a coupon rate of 10%, and has a yield to maturity of 12%. The current yield on this bond is

Respuesta :

abiolataiwo2015

Answer:

10.65%.

Explanation:

Calculation to determine what The current yield on this bond is

First step is to determine the Present value (PV) using Financial calculator

FV = 1000

n = 4

PMT =10%*$1,000= 100

i = 12

PV=?

Hence,

PV = 939.25

Now let determine the Current yield

Current yield = $100/$939.25

Current yield = 10.65%

Therefore The current yield on this bond is 10.65%

Otras preguntas