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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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    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 ...

    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.