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8 January, 15:48

Determine the current yield on a corporate bond investment that has a face value of $1,000, pays 4.60 percent, and has a current price of $950

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  1. 8 January, 16:19
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    To find the current yield - take the annual interest payment and divide it by the current bond price.

    To find the annual interest payment - take the interest rate and multiply it against the bond's face value.

    Annual interest payment = ($1,000) (.0460))

    Annual interest payment = $46

    To find the current yield - take the annual interest payment and divide it by the current bond price.

    Current yield = $46/$950

    Current yield = 4.84%
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