What is the current yield on a zero coupon bond with a remaining life of 17...
What is the current yield on a zero coupon bond with a remaining life of 17 years, a yield to maturity of 6.6%, and a par value of $1000? (Round to 100th of a percent and enter as a percentage, e.g. 12.34% as 12.34 and state as an annual rate.)
Homework Answers
Current yield on a zero coupon bond = 0.00%
Current yield = Annual Coupon payment / Current Price of Bond
A Zero-coupon bond does not pay annual coupons (interest).
Thus, its annual coupon payment = $0
and
current yield = 0.00%
Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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