what is the current yield bond whose face value is 33,200 and pays a yearly interest 13.7% if purchased at 36,700
Answer (1)
The answer is 12.39%Solution Given:Face value: 33,200Coupon rate: 13.7%Purchase price: 36,700Step 1: Compute the annual interest (coupon payment)13.7% of 33,200→ 0.137 × 33,200 = ₱4,548.40 Step 2: Use the current yield formulaCurrent Yield = (Annual Interest ÷ Purchase Price) × 100→ (4,548.40 ÷ 36,700) × 100 ≈ 12.39%
