Question

The Halstead Corporation has a bond outstanding with a face value of $5,000 that matures in 10 years. The bond certifica...

The Halstead Corporation has a bond outstanding with a face value of $5,000 that matures in 10 years. The bond certificate indicates that the stated coupon rate for this bond is 8.9% and that the coupon payments are to be made semiannually. How much will each semiannual coupon payment be?

a.

$222.50

b.

$445.00

c.

$667.50

d.

$890.00

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Answer #1

Semi-annual Coupon Payment = Coupon Rate * Par Value/2

Semi-annual coupon payment = 8.9% * $5000/2

Semi-annual coupon payment = $222.50

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