Brown Enterprises’ bonds currently sell for $1,025. They have a 9-year maturity, an annual coupon of $80, and a par value of $1,000. What is their current yield?

7.80%
7.90%
9.00%
9.10%
9.20%

7.90%

Adams Enterprises’ noncallable bonds currently sell for $1,120. They have a 15- year maturity, an annual coupon of $85, and a par value of $1,000. What is their yield to maturity?

To calculate the current yield of a bond, you need to divide the annual coupon payment by the current market price and express it as a percentage.

In this case, the annual coupon payment is $80 and the current market price is $1,025.

The formula to calculate current yield is:

Current Yield = (Annual Coupon Payment / Current Market Price) * 100

Plugging in the values:

Current Yield = ($80 / $1,025) * 100 ≈ 7.80%

Therefore, the correct answer is 7.80%.

To calculate the current yield of a bond, you need to divide the annual coupon payment by the current market price of the bond and then multiply by 100 to get the percentage.

In this case, the annual coupon payment is $80, and the current market price of the bond is $1,025.

To calculate the current yield:

Current Yield = (Annual Coupon Payment / Current Market Price) × 100
= ($80 / $1,025) × 100
= 7.80%

Therefore, the current yield of Brown Enterprises' bonds is 7.80%.

So the correct answer is 7.80%.