If an 8% coupon bond is trading for $1,025.00, it has a current yield of

Name: If an 8% coupon bond is trading for $1,025.00, 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 an 8% coupon bond with a face value of $1,000 (as is standard unless otherwise specified), the annual coupon payment is $80 (8% of $1,000). If the bond is trading for $1,025.00, the current yield is $80 / $1,025.00 = 0.078 or 7.8%.

If an 8% Coupon Bond Is Trading for $1,025