On February 1, 2000, Herro Corp. sold an $800 million bond issue to finance the purchase of a new distribution facility. These bonds were issued in $1,000 denominations with a maturity date of February 1, 2030. The bonds have a coupon rate of 10.00% with interest paid semiannually.

1. Assume that the bonds are selling for $1,175.00. Determine the current yield and the yield-to-maturity. Explain what these terms mean.