Your firm has 7,500 bonds outstanding currently priced at $1,105.74, paying a $40 annual coupon and...
Your firm has 7,500 bonds outstanding currently priced at $1,105.74, paying a $40 annual coupon and sporting a 0.8901 YTM. How much cash will your firm need on hand to cover the next coupon payment?
$300,000
$150,000
about $3.3 million
Homework Answers
The total amount of coupon payment = coupon payment per bond * number of bonds outstanding.
Total amount of coupon payment = $40 * 7,500.
Total amount of coupon payment = $300,000.
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