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trapecia [35]
3 years ago
11

Genova Corporation has a four year 10% annual coupon bond. The price of the bond is $956.12. The Yield to Maturity is 11.43%. Wh

at is the current yield on this bond
Business
1 answer:
lbvjy [14]3 years ago
8 0

Answer:

10.46%

Explanation:

Data provided in the question

NPER = 4 years

Price of the bond is $956.12

Yield to maturity is 11.43%

Coupon rate = 10%

We assume the face value be $1,000

So the coupon payment is

= Face value × Coupon rate

= $1,000 × 10%

=  $100

Now the current yield on this bond is

= Coupon payment ÷ Price of the bond

= $100 ÷ $956.12

= 10.46%

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