Question

Sweet Sue Foods has bonds outstanding with a coupon rate of 5.50 percent paid semiannually and sell for $1,917.12. The bonds have a par value of $2,000 and 17 years to maturity. What is the current yield for these bonds

Answer 1

Answer:

Current yield=5.74%

Explanation:

Calculation for the current yield for these bonds

Current yield = (.055× $2,000)/$1,917.12

Current yield =$110/$1,917.12

Current yield=0.0574*100

Current yield=5.74%

Therefore the current yield for these bonds will be 5.74%