Answer:
The current yield is 11%
Explanation:
The computation of the current yield is shown below:
Current yield is
= Annual coupon ÷ Bond price
where,
Annual coupon is
= 0.09 × $1,000
= $90
And, the price of the bond is $818
So, the current yield is
= $90 ÷ $818
= 11%
Hence, the current yield is 11%
We simply applied the above formula so that the current yield could come
