Question

The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually. How much will each semiannual coupon payment be

Answer 1

Answer:

$40

Explanation:

Face value= $1,000

Time = 15*2= 30 semi-annual periods

Coupon rate = 8%/2= 4%

The semi-annual coupon payment = Semi-annual coupon Rate*Face value

The semi-annual coupon payment = 0.04*1,000  

The semi-annual coupon payment = $40.