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QUESTION 9 A semi-annual bond having the following was issued by a corporation: $200,000 face amount 10% coupon rate 8 % yiel

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Answer #1

Face Value = $200,000
Annual Coupon Rate = 10.00%

Semiannual Coupon Rate = Annual Coupon Rate / 2
Semiannual Coupon Rate = 10.00% / 2
Semiannual Coupon Rate = 5.00%

Semiannual Interest Payment = Semiannual Coupon Rate * Face Value
Semiannual Interest Payment = 5.00% * $200,000
Semiannual Interest Payment = $10,000

So, the semiannual interest payment on the bond is $10,000

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