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Mnenie [13.5K]
3 years ago
5

A 4.30 percent coupon municipal bond has 15 years left to maturity and has a price quote of 97.85. The bond can be called in fou

r years. The call premium is one year of coupon payments. (Assume interest payments are semiannual and a par value of $5,000.) Compute the bond’s current yield. (Do not round intermediate calculations. Round your answer to 2 decimal places.).
Business
1 answer:
yanalaym [24]3 years ago
6 0

Answer:

Bond's Current Yield  4.39%

Explanation:

The bond's current yield is calculated as below:

Bond's Current Yield = Annual Coupon Payment/Current Bond Price*100

Substituting values in the above formula, we get,

Bond's Current Yield = (100*4.30%)/97.85*100 = 4.39%

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4 years ago
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4 years ago
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Answer:

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I Did it

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