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    Current yield/yield to maturity

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    Apple has 8% coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for 93% of par, or $930. Compute:

    1. The Current Yield
    2. The Yield to Maturity

    What is the difference between these two?

    © BrainMass Inc. brainmass.com October 10, 2019, 1:57 am ad1c9bdddf
    https://brainmass.com/business/bond-valuation/current-yield-yield-maturity-356027

    Solution Preview

    1. Current yield = Annual Interest/Price
    Annual interest = 1,000 X 8% = 80
    Price = 930
    Current yield = 80/930 = 8.60%
    2. Yield to ...

    Solution Summary

    The solution explains how to calculate the current yield and yield to maturity for a bond.

    $2.19