Calculating and interpreting current yield and yield to maturity Find the current yield of a 10%, 25-year bond that's currently priced in the market at $1,250. Now, use a financial calculator to find the yield to maturity on this bond (use annual compounding). What's the current yield and yield to maturity on this bond if it trades at $1,000? If it's priced at $750? The par value of the bond is $1,000. Round your answers to two decimal places. Do not round intermediate calculations. Quote Current Yield Yield to Maturity 10%, 25 yr., $1,250  %  % 10%, 25 yr., $1,000  %  % 10%, 25 yr., $750  %  %

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Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
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Chapter12: Investing In Stocks And Bonds
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Calculating and interpreting current yield and yield to maturity

Find the current yield of a 10%, 25-year bond that's currently priced in the market at $1,250. Now, use a financial calculator to find the yield to maturity on this bond (use annual compounding). What's the current yield and yield to maturity on this bond if it trades at $1,000? If it's priced at $750? The par value of the bond is $1,000. Round your answers to two decimal places. Do not round intermediate calculations.

Quote Current Yield Yield to Maturity
10%, 25 yr., $1,250  %  %
10%, 25 yr., $1,000  %  %
10%, 25 yr., $750  %  %
 
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