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15 August, 23:46

Sweet Sue Foods has bonds outstanding with a coupon rate of 5.02 percent paid semiannually and sell for $1,948.34. The bonds have a par value of $2,000 and 17 years to maturity. What is the current yield for these bonds

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  1. 16 August, 00:03
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    5.15%

    Explanation:

    Following data provided in the question

    Coupon rate = 5.02%

    Present value of the bond = $1,948.34

    Par value = $2,000

    Time period = 17 years

    By considering the above information, the current yield on the bond is

    = (Par value * coupon rate interest) : (Present value of the bond)

    = ($2,000 * 5.02%) : ($1,948.34)

    = 5.15%
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