The current yield of the bond is 30%.
What is a bond?
- A bond is a sort of financial security in which the issuer owes the bearer a debt and is obligated to repay the principle of the bond as well as interest over a specified period of time, depending on the terms.
- Interest is normally paid at regular intervals.
To calculate the current yield of the bond:
- Current yield = Annual coupon payment / Bond market price
- So, 90/300 × 100 = 30%.
Therefore, the current yield of the bond is 30%.
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