00:01
Okay, so i see that you need help with this and it says what is the yields on a five -year corporate bond.
00:22
And so identify the bonds characteristics.
00:24
So you're going to determine the bonds face value.
00:27
So the bonds face value, it's usually $1 ,000.
00:39
You're going to identify the bond's coupon rate.
00:44
That's the annual interest rate paid by the.
00:47
Bond you are going to note the bond's current market price i'm just going to put mp confirm the bond's maturity period five years in this case we're going to calculate the annual coupon payment we're going to take 1 ,000 and we are going to so this is the annual coupon payment so that's when we take 1 ,000 and then we are going to multiply it by 0 .05 and that's $50.
01:27
And so we're going to determine the current yield.
01:32
And so we're going to take $1 ,000 minus $50 and that's $950.
01:40
The current yield would be $50 divided by $950, current yield.
01:55
And so that is going to be 5 .26%...