Current Yield What's the current yield of an 8.15 percent coupon corporate bond quoted at a price of 94.30?
A) 4.30%
B) 8.01%
C) 8.15%
D) 8.64%

Question

Quizplus · Accepted Answer

The formula for calculating current yield is:
Current Yield = (Annual Interest Payment / Market Price) x 100%

Annual Interest Payment for the bond would be (8.15% x $1,000 face value) = $81.50. 
Market price of the bond is quoted as $94.30.

Current Yield = ($81.50 / $943) x 100% ≈ 8.64%

Therefore, the current yield of the bond would be 8.64%, which is option D.

Current Yield What's the Current Yield of an 8