A bond is priced in the market at $1,170 and has a coupon of 10%. Calculate...

Question

Question

A bond is priced in the market at $1,170 and has a coupon of 10%. Calculate the bonds current yield

The bonds current yield is __% (Round to two decimal places)

Answer 1

Answer #1

Annual coupon=$1000*10%=$100

Hence current yield=Annual coupon/Current price

=(100/1170)

which is equal to

=8.55%(Approx).

Answer 2

Similar Homework Help Questions

BA Corp is issuing a 10-year bond with a coupon rate of 7.17 percent. The interest...

BA Corp is issuing a 10-year bond with a coupon rate of 7.17 percent. The interest rate for similar bonds is currently 7.22 percent. Assuming annual payments, what is the value of the bond? (Round answer to 2 decimal places, e.g. 15.25.) Pierre Dupont just received a cash gift from his grandfather. He plans to invest in a five-year bond issued by Venice Corp. that pays an annual coupon of 5.55 percent. If the current market rate is 8.24 percent,...
Calculate the current yield on the described bond. A $1500 Treasury bond with a coupon rate...

Calculate the current yield on the described bond. A $1500 Treasury bond with a coupon rate of 2.8% that has a market value of $1275 The current yield is %. (Round to two decimal places as needed.)
4.C.49 Calculate the current yield on the described bond. A $1000 Treasury bond with a coupon rate of 4.4% that has a m...

4.C.49 Calculate the current yield on the described bond. A $1000 Treasury bond with a coupon rate of 4.4% that has a market value of $950 The current yield is %. (Round to two decimal places as needed.)

A(n) 17-year bond has a coupon of 8% and is priced to yield 11%. Calculate the...

A(n) 17-year bond has a coupon of 8% and is priced to yield 11%. Calculate the price per $1,000 par value using semi-annual compounding. If an investor purchases this bond two months before a scheduled coupon payment, how much accrued interest must be paid to the seller? The price of the bond, PV, is $ . (Round to the nearest cent.) If an investor purchases this bond two months before a scheduled coupon payment, the amount of accrued interest to...
A 6.70 percent coupon bond with 10 years left to maturity is priced to offer a...

A 6.70 percent coupon bond with 10 years left to maturity is priced to offer a yield to maturity of 8.4 percent. You believe that in one year, the yield to maturity will be 8.0 percent. What is the change in price the bond will experience in dollars? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
If a coupon bond has two years to maturity, a coupon rate of 10%, a par...

If a coupon bond has two years to maturity, a coupon rate of 10%, a par value of S900, and a yield to maturity of 14%, then the coupon bond will sell for $(Round your response to the nearest two decimal place The price of a bond and its yield to maturity are Which of the following statements is not true? O A. Current yield is a worse approximation of yield to maturity for long-term bonds when compared to short-term...

1. Bond A sells at a premium, so the YTM must be less than the coupon...

1. Bond A sells at a premium, so the YTM must be less than the coupon rate. Assume the required rate of return remains constant when we're trying to determine the likelihood of a call being made. If the YTM stays less than the 9% coupon rate, then 5 years from now when the call protection ends, the bond issuer will call the bond, pay the call premium, and refinance with new bonds at lower market rates. Thus, the market...
Problem 8.10 Debra King wants to invest in four-year bonds that are currently priced at $898.49....

Problem 8.10 Debra King wants to invest in four-year bonds that are currently priced at $898.49. These bonds have a coupon rate of 6.0 percent and make semiannual coupon payments. What is the current market yield on this bond? (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.) Current market yield = _______%
Debra King wants to invest in four-year bonds that are currently priced at $898.49. These bonds...

Debra King wants to invest in four-year bonds that are currently priced at $898.49. These bonds have a coupon rate of 6.0 percent and make semiannual coupon payments. What is the current market yield on this bond? (Round intermediate calculations to 5 decimal places, e.g. 1.25145 and final answer to 2 decimal places, e.g. 15.25%.) Current market yield % please show steps

A(n) 17-year bond has a coupon of 6% and is priced to yield 9%. Calculate the...

A(n) 17-year bond has a coupon of 6% and is priced to yield 9%. Calculate the price per $1,000 par value using semi-annual compounding. If an investor purchases this bond two months before a scheduled coupon payment, how much accrued interest must be paid to the seller?