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Sprint Bond Value Calculation

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A Sprint bond has 5 years until maturity a coupon rate of 8 percent, and sell for 2,000.

a. What is the current yield on the bond?
b. What is the yield to maturity?

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Solution Summary

This solution is comprised of a detailed explanation to answer what is the current yield on the bond and what is the yield to maturity.

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Current yield = Annual interest payment/Market price
= (1,000 x 8%)/2,000
= 4.00%

We need to calculate how much the bonds have been ...

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