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vekshin1
3 years ago
7

A bond with par value of $1,000 has an annual coupon rate of 4.8% and currently sells for $970. What is the bond’s current yield

? (Round your answer to 2 decimal places.)
Business
1 answer:
podryga [215]3 years ago
8 0

Answer:

The Bond's Current yield = 4.95%

Explanation:

Annual coupon = Value of Bond * Annual Coupon rate

Annual coupon =  $1000 * 4.8%

Annual coupon =$48

The Bond Current yield =Annual coupon / Current price

The Bond Current yield =  $48 / $970

The Bond Current yield = 0.049485

The Bond Current yield = 4.9485

The Bond Current yield = 4.95%

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