Longly Trucking is issuing a 20-year bond with a $2,000 face value tomorrow. The issue is to

Question:

Longly Trucking is issuing a 20-year bond with a $2,000 tomorrow. The issue is to pay an 8% rate, because that was the interest rate while it was being planned. However, rates increased suddenly and are expected to be 9% when the bond is marketed. What will Longly receive for each bond tomorrow?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... 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...