Answer:
10.33%
Explanation:
The computation of the current yield on the bonds is shown below:-
current yield on the bonds = Coupon bond ÷ Current price of bond
= (Par value × Coupon rate) ÷ (Par value × Current selling price percentage)
= ($1,000 × 11.2%) ÷ ($1,000 ÷ 108.4%)
= $112 ÷ $1,084
= 10.33%
Therefore we have applied the above formula.
