**(Annual Coupon / Current Price) × 100**

(Relating to example in questions asked)

Notice it's higher than the coupon rate (6%) because the bond is trading _below_ par — you're paying less but still getting the same $6 coupon, so your yield is higher.

The key relationship to remember:

- Bond trading **below par** → Current yield **above** coupon rate
- Bond trading **above par** → Current yield **below** coupon rate
- Bond trading **at par** → Current yield **equals** coupon rate