A Puppy Pet Services $1,000 bond has a 7 1/2% coupon rate,matures in 2010 and is currently quoted at 82.The current yield is

Question

Quizplus · Accepted Answer

To find the current yield, we need to divide the annual interest payment (coupon rate of 7.5% of the $1,000 face value equals $75) by the current market price (quoted at 82% of the $1,000 face value equals $820):

Current yield = ($75 / $820) x 100% = 9.15%

Therefore, the correct answer is choice (C).

A Puppy Pet Services $1,000 Bond Has a 7 1/2