Malko Enterprises’ bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield?

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asked Feb 5, 2021 147k views

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Or Betzalel · Answer 1 · 2021-02-09T17:17:56+0000

Answer:

Current yield = 7.14%

Step-by-step explanation:

As we know that: current yield = Annual coupon payment/Current market price of bond

= 75/1050

= 7.14%

this rate represents for an investor would expect to earn because face vale and market price of bonds differs so the investor much rely on that factor.

Malko Enterprises’ bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield?

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