A bond matures in 12 years and pay 8 percent coupon annually. The bond has face value of RM1000 and currently sells for RM985. What is the bond’s current yield and yield to maturity?

1. Current yield.

Coupon Payment = CR% x Par value

Current Yield (%) = Coupon Payment

Value or Price of Bond

Yield to maturity. (answer:8.19%)

YTM = CP + (PV – Vb)/n

(PV + Vb)/2

2.Kufman Enterprise has bonds outstanding with a RM1,000 face value and 10 years left until maturity. The bonds have an 11 percent annual coupon payment. The current price of these bonds is RM1,175. Calculate:

1. Current Yield (CY).

1. Yield To Maturity (YTM).

3. A bond that matures in 10 years sells for RM985. The bond has a face value of RM1,000 and a 7 percent annual coupon. Calculate;

Current Yield (CY).

Yield To Maturity (YTM).

4. A 10-year, 12 percent semi-annually coupon bond, with a par value of RM1,000 sells for RM1,100. Calculate;

1. Current Yield (CY).
2. Yield To Maturity (YTM).