According to the given information, The current yield of Gwendolyn Francis is 8.74%.
Given:
Annual interest amount = $70
Current price = $980
Current yield = Annual interest amount / Current price
= 70 / 980 = 0.0714
Current yield = 8.74%.
- The annual income (interest or dividends) from an investment is divided by the security's current market value to determine its current yield. In this measure, the price of a bond is considered rather than the bond's face value.
- In fixed income investing, a bond's current yield is calculated by dividing its yearly income, which includes dividends and interest payments, by the security's current price.
- Investors can buy bonds at a premium or a discount, depending on how much they expect the market price of the bond to fluctuate, which influences the yield at the time of purchase.
- When calculating the current yield for stocks, one alternative is to divide the dividends received by the stock's current market value.
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