If a 7.25% coupon bond is trading for $982.00, it has a current yield of

Name: If a 7.25% coupon bond is trading for $982.00, it has a current yield of
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The current yield of a bond is calculated by dividing the annual coupon payment by the market price of the bond. For a 7.25% coupon bond, the annual coupon payment is 7.25% of the face value, which is typically $1,000, so the annual coupon payment is $72.50. The current yield is then $72.50 / $982.00 = 0.0738 or 7.38%.

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