1000.00 par value bonds of Uptown Tours have a coupon rate of 6.5 and a current...

Question

Question

1000.00 par value bonds of Uptown Tours have a coupon rate of 6.5 and a current price quote of 101.23 what is current yield

Answer 1

Answer #1

Calculation of Current Yield:

Coupon rate = 6.5%

Par value = $1000

Coupon amount = 6.5% of $1000 = $65

Current Price = 101.23% of $1000 = $1012.30

Current Yield = Coupon amount/ Current Price = (65 / 1012.3) * 100

Current Yield = 6.42%

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Answer 2

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