contestada

Bond P is a premium bond with a coupon rate of 9.6 percent. Bond D is a discount bond with a coupon rate of 5.6 percent. Both bonds make annual payments, have a YTM of 7.6 percent, have a par value of $1,000, and have eleven years to maturity. a. What is the current yield for Bond P

Respuesta :

truonghanhduyen

Answer:

The current yield for Bond P is 21.49%

Explanation:

Current value of bond = Face value/(1+ YTM)^n

= $1000/((1+7.6%)^11) = $446.75

Annual coupon payment of Bond P = par value x coupon rate = $1000 x 9.6% = $96

Current yield of bond = annual coupon payment/ current value of bond

= $96/ $446.75 = 21.49%

Otras preguntas