Wize University Introduction to Finance Textbook > Bond Valuation
The Current Yield
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The Current Yield
- One year return based on current price of the bond.
- Ratio of the annual coupon and bond price.
Wize Tip
The current yield should be between the coupon rate and YTM.
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Example: Current Yield
A bond is currently trading for $1041.43. It has a coupon rate of 8% and a face value of $1,000.
What is the current yield?
Practice: Current Yield
An 8-year bond with a coupon rate of 9% paid semi-annually is yielding 10%. What is the bond's current yield?
Round your work to at least 6 decimal places and final answer to 2 decimal places.
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