The outstanding bonds of Jacksen Global Freight carry an 8% coupon and have a current market price of $1,054. The bonds have a face value of $1,000. What is the current yield on these bonds?

Question

Quizplus · Accepted Answer

The current yield is calculated by dividing the annual coupon payment by the current market price of the bond. The annual coupon payment is 8% of the face value, which is $80. The current yield is $80 / $1,054 = 0.0759 or 7.59%.

The Outstanding Bonds of Jacksen Global Freight Carry an 8