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Workman Software has 11 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 108.3 percent of par. a. What is the current yield on the bonds

Respuesta :

Tundexi

Answer:

10.16%

Explanation:

Coupon amount = 11% * 1000

Coupon amount = $110

Price of bond = 1000*108.3%

Price of bond = $1,083

Current yield = Coupon amount / Price of bond

Current yield = $110 / $1,083

Current yield = 0.1015697

Current yield = 10.16%

So, the current yield on the bonds is 10.16%.

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