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Current Yield

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Health Foods' bonds have 7 years remaining to maturity. The bonds have a face value of $1,000 and a yield to maturity of 8 percent. They pay interest annually and have a 9 percent coupon rate. What is their current yield?

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Solution Summary

This solution calculates the current yield of a bond when the yield to maturity is different from the coupon rate.

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Current yield: Annual interest rate paid by a bond, expressed as a percentage ...

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