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Homework answers / question archive / Suppose a firm has the following bond information: Years to maturity: 8 Coupon Rate: 3%, semi-annual payments Par Value: $1,000 Price: 95% of par value **Calculate the current yield on the bond

Suppose a firm has the following bond information: Years to maturity: 8 Coupon Rate: 3%, semi-annual payments Par Value: $1,000 Price: 95% of par value **Calculate the current yield on the bond

Finance

Suppose a firm has the following bond information:

Years to maturity: 8

Coupon Rate: 3%, semi-annual payments

Par Value: $1,000

Price: 95% of par value

**Calculate the current yield on the bond. (Enter percentages

as decimals and round to 4 decimals).

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Computation of the current yield:-

Current yield = Annual coupon payments / Current price of the bond

= $1,000*3% / ($1,000 * 95%)

= $30 / $950

= 3.1579%

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