You are on page 1of 1

If a bond with face value of $1,000 and a coupon rate of 8% is selling at a price of $970, what is

the current rate of the coupon? Current Yield = 80/970=0.0825 or 8.25%

Conclusion:

Current Yield > Rate of coupon

That is the bond is sold at a discount

You might also like