In: Finance
Assume you have a bond with a semi-annual interest payment of $50, a par value of $1,000, and a current market price of $770. What is the current yield of the bond?
Annual interest payment = 50 * 2 = 100
Current yield = (Annual coupon / price) * 100
Current yield = (100 / 770) * 100
Current yield = 12.99%