The yield on a corporate bond with a face value of $1000 after removal of discount would be =$60.
What is interest rate?
Interest rate can defined as the payment received by an individual after investing a particular amount of money for a given period of time.
The principal amount after removal of $950 discount = $1000
The rate of interest (R) = 6%
The time of investment (T) = 1
Then the simple interest;
= P × T × R/100
= 1000 × 1 × 6/100
= 6000/100 = $60
Therefore, the yield of the corporate bond would be extra $60.
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