Homework Answers
Answer:
Correct answer is:
10%
Explanation:
Par value = $18 million = $18,000,000
Semiannual cash(coupon) payment = $900,000
Semiannual coupon rate = 900000 / 18000000 * 100 = 5%
Stated annual rate of interest = 5% * 2 = 10%
Stated annual rate of interest = 10%
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