To determine the current yield of Malko Enterprises' bonds, follow these steps:
1. Understand the Key Variables:
- The bond's current market price: [tex]$1,184
- The bond's annual coupon payment: $[/tex]103.8
- The bond's par (face) value: $1,000
2. Current Yield Formula:
The current yield can be calculated using the formula:
[tex]\[
\text{Current Yield} = \left( \frac{\text{Annual Coupon Payment}}{\text{Current Market Price}} \right) \times 100
\][/tex]
3. Substitute the Known Values:
[tex]\[
\text{Current Yield} = \left( \frac{103.8}{1184} \right) \times 100
\][/tex]
4. Calculate the Result:
Perform the division first:
[tex]\[
\frac{103.8}{1184} \approx 0.08766891891891891
\][/tex]
Then, multiply by 100 to convert it to a percentage:
[tex]\[
0.08766891891891891 \times 100 \approx 8.766891891891891\%
\][/tex]
5. Final Answer:
Based on the calculation, the current yield of Malko Enterprises' bonds is approximately 8.77%.
Thus, the correct answer is:
[tex]\[ \boxed{8.77\%} \][/tex]
