You paid $814 for a corporate bond that has a 5.01% coupon rate. What is the...

You paid $814 for a corporate bond that has a 5.01% coupon rate. What is the current yield?

Assume par value = $1,000

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

Expert Solution

Given

Coupon rate = 5.01%

Annual Coupon Payment = $1,000 * 5.1%

= $ 51

Current Price of bond = $ 814

Current Yield = 51 / 814

= 0.0627

Current Yield = 6.27%

jeff jeffy answered 3 years ago

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