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cricket20 [7]
1 year ago
9

A bond has a par value of $1,000, a market price of $300, and a 9% coupon rate. It will mature in 5 years. What is the current y

ield of the bond?.
Business
1 answer:
ivanzaharov [21]1 year ago
5 0

The current yield of the bond is 30%.

<h3>What is a bond?</h3>
  • A bond is a sort of financial security in which the issuer owes the bearer a debt and is obligated to repay the principle of the bond as well as interest over a specified period of time, depending on the terms.
  • Interest is normally paid at regular intervals.

To calculate the current yield of the bond:

  • Current yield = Annual coupon payment / Bond market price
  • So, 90/300 × 100 = 30%.

Therefore, the current yield of the bond is 30%.

Know more about bonds here:

brainly.com/question/26271508

#SPJ4

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