Calculate the current yield for the 4 bonds below Issuer Face Value Coupon Rate Rating Quoted...

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Question

Calculate the current yield for the 4 bonds below Issuer Face Value Coupon Rate Rating Quoted...

Calculate the current yield for the 4 bonds below

Issuer	Face Value	Coupon Rate	Rating	Quoted Price	Years until Maturity	Sinking Fund	Call Period
ABC Energy	$1,000.00	5%	AAA	$703.10	20	Yes	3 Years
ABC Energy	$1,000.00	0%	AAA	$208.30	20	Yes	Na
TransPower	$1,000.00	10%	AA	$1092.00	20	Yes	5 Years
Telco Utilities	$1,000.00	11%	AA	$1206.40	30	No	5 Years

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Answer 1

Answer #1

current yield = coupon payment / quoted price

coupon payments:

ABC energy = $1000*5%=>$50.

ABC enegy = $1000*0%=>$0.

Transpower =$1000*10%=>$100

Telco utilities =$1000*11%=>$110

ABC energy ($50 / 703.10)=>	7.11%
ABC energy ($0/208.30)	0.00%
Transpower ($100/1092)	9.16%
Telco utilities ($110/1206.40)	9.12%

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Answer 2

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