Question

Suppose that today, the current yield for a corporate bond is 4.3%. If the market price goes up by 11% tomorrow, compute the current yield after the increase.

Answer 1

Step-by-step explanation:

(4.3/A)×100

The formula for current yield is given as

CY = Annual interest payment / Current Bond Price

Although the current bond price wasn't stated in the question but I'll assume a variable to it so that you can always substitute whenever you get a value.

Assuming the current bond price is A, the current yield will then become

(4.3/A)×100