FREE Trial

Calculate the annual interest and the semiannual interest payment for the following corporate bond issues with a

Question:

Calculate the annual interest and the semiannual interest payment for the following corporate bond issues with a face value of $1,000.

Annual interest Rate Semiannual Interest Annual Interest Amount Payment 3.80 % 4.10 % 6.00 % 5.40%


Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
Transcribed Image Text:

Annual interest Rate Semiannual Interest Annual Interest Amount Payment 3.80 % 4.10 % 6.00 % 5.40%

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 61% (13 reviews)

Annual Interest Rate 380 ...View the full answer


answer-question-section
Answered By
tutor-profile-image
Kalpana Nagrani
I am a postgraduate in biotechnology and was the topper of my department, got gold medal in my field. Have experience of teaching from 2013 both in school as well as in coaching. Have experience of lab work. I treat students as friend and help them in solving their problems.
0.00 0 Reviews 10+ Question Solved
Related Book For  book-img-for-question
Personal Finance

Personal Finance

ISBN: 978-1259720680

12th edition

Authors: Jack R. Kapoor, Les R. Dlabay, Robert J. Hughes, Melissa Hart

See More Books
Question Posted:
See More Questions

Related Video

Bond valuation is the process of determining the worth of a bond. It is based on the present value of the bond\'s future cash flows, which include coupon payments and the return of the bond\'s face value (or \"principal\") at maturity. The discount rate used in the calculation is directly tied to prevailing interest rates, and a rise in interest rates will decrease the present value of the bond and thus lower its price. Conversely, a fall in interest rates will increase the present value of the bond and raise its price. Interest rates serve as a benchmark for determining the value of a bond, as they determine the discount rate used in the bond valuation calculation. The most commonly used measure of interest rates is the yield to maturity (YTM), which represents the internal rate of return of an investment in a bond if the investor holds the bond until maturity and receives all scheduled payments. Yield to maturity is a function of the coupon rate, the current market price of the bond, the face value of the bond, and the number of years remaining until maturity. By comparing the yield to maturity of a bond to prevailing market interest rates, an investor can assess the relative value of the bond.

Students also viewed these Business questions

The Last Close Call - ISBN: 0593546733 - Free Book