Cold Stone's bonds have 12 years remaining to maturity. The bonds have a face value of $1,000

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Cold Stone's bonds have 12 years remaining to maturity. The bonds have a face value of $1,000 and a yield to maturity of 8%. They pay interest annually and have a 6% coupon rate. What is their current yield?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Financial Management Theory and Practice

ISBN: 978-0176517304

2nd Canadian edition

Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason

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