Based on the face value of the bond and the market price as well as the yield to maturity, the current yield is 7.14%.
What is the current yield on this bond?
First find the coupon rate. You can do this by using a Spreadsheet and the PMT function.
Rate = 7.339%
Nper = 8 years
PV = -980
FV = 1,000
The coupon is $70 when rounded off. In percentage this is:
= 70 / 1,000 x 100%
= 7%
The current yield is found as:
= Coupon rate x Par value / Current price
= 7% x 1,000 / 980
= 7.14%
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