A bond has a face value of $1,200 and a 5% coupon rate

Question

Question

A bond has a face value of $1,200 and a 5% coupon rate, its current price is $1,140, and it is expected to increase to $1,150 next year.

The current yield is _______ %. (Enter your response rounded to one decimal place.)

Answer 1

Answer #1

Current Yield = (Cupon Amount / Current Price of Bond) * 100

Cupon Amount = Cupon Rate * Face Value of Bond

Cupon Rate = 5%

Face Value of Bond = $1200

Therefore Cupon Amount

= 5% of $1200

= 0.05 * $1200

= $60

Current Price of Bond = $1,140

Current Yield = ($60 / $1,140) * 100

= 5.3 % (Rounded to one decimal place)

Answer 2

Similar Homework Help Questions

A bond has a face value of $800 and a 10% coupon rate, its current price...

A bond has a face value of $800 and a 10% coupon rate, its current price is S740, and it is expected to increase to $750 next year. The current yield is % (Enter your response rounded to one decimal place.) The expected rate of capital gain s %. Enter your response r unded to one decimal place) The expected rate of return is 1% (Enter your response rounded to one decimal place)
A bond has a face value of $1,100 and a 10% coupon rate, its current price...

A bond has a face value of $1,100 and a 10% coupon rate, its current price is $1,040, and it is expected to increase to $1,070 next year. The current yield is □%. (Enter your response rounded to one decimal place.)
please show steps 11. Abond has a face value of $800 and a 5% coupon rate,...

please show steps 11. Abond has a face value of $800 and a 5% coupon rate, its current price is $740, and it is expected to increase to $770 next year. The current yield is _%. (Enter your response rounded to one decimal place.) The expected rate of capital gain is %. (Enter your response rounded to one decimal place.) The expected rate of return is %. (Enter your response rounded to one decimal place.)

A bond has a face value of $1 comma 200 and a 10% coupon rate, its...

A bond has a face value of $1 comma 200 and a 10% coupon rate, its current price is $1 comma 140, and it is expected to increase to $1 comma 170 next year. QUESTION-- The current yield is (BLANK)%. (Enter your response rounded to one decimal place.)
( End-of-Chapter Exercise 24 A bond has a face value of $1,000 and a 10% coupon...

( End-of-Chapter Exercise 24 A bond has a face value of $1,000 and a 10% coupon rate, its current price is $940, and it is expected to increase to $980 next yea The current yield is [ % Enter your response rounded to one decimal place.)
Consider a bond with a 5% annual coupon and a face value of $1,200. Complete the...

Consider a bond with a 5% annual coupon and a face value of $1,200. Complete the following table. (Enter your responses rounded to two decimal places.) Years to Maturity Yield to Maturity Current Price 3% AW A

Consider a bond with a 7% annual coupon and a face value of $1,200 Complete the...

Consider a bond with a 7% annual coupon and a face value of $1,200 Complete the following table. (Enter your responses rounded to two decimal places) Years to Yield to Current Maturity Maturity Price 5% 7% 7% 5%
1. An annual coupon bond has a coupon rate of 5.4%, face value of $1,000, and...

1. An annual coupon bond has a coupon rate of 5.4%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 5.4%, what is its Modified Duration? Round to three decimal places. 2. A semi-annual coupon bond has MacD of 23.6 years, yield-to-maturity of 6.6%, and price of $1071.43. What is its DV01? Answer in dollars, rounded to three decimal places. 3. You own a bond portfolio worth $31,000. You estimate that your portfolio has...
A 17-year, $1000 face value bond makes annual payments and has a coupon rate of 16...

A 17-year, $1000 face value bond makes annual payments and has a coupon rate of 16 percent. If the current yield on the bond is 15 percent, what is the bond's price? Enter your answer rounded to two decimal places.

A bond with a face value of $1,000 has 10 years until maturity, carries a coupon...

A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 7.5%, and sells for $1,150. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.) a. If the bond has a yield to maturity of 10.5% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.) b. What will be the rate of return...