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Calculating the current yield in given case of a Consol

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What is the yield to maturity on a Consol that pays an annual coupon of $70, and sells for $700? What is the current yield of the console? Explain the relationship between yield to maturity and current yield on a Consol?

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Solution calculates the current yield in the given case of a Consol. It also explains the relationship between YTM and current yield on a Consol.

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Current price of Consol=Po=$700
Coupon amount of Consol=C=$70

Current ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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