Six-month U.S. dollar LIBOR is currently 4.375%; your firm issued floating-rate notes indexed to six-month U.S. dollar LIBOR plus 50 basis points. What is the amount of the next semi-annual coupon payment per U.S. $1,000 of face value?

Question

Quizplus · Accepted Answer

The next semi-annual coupon payment per U.S. $1,000 of face value can be calculated as follows:

Coupon rate = 6-month U.S. dollar LIBOR + 50 basis points
= 4.375% + 0.50%
= 4.875%

Coupon payment = Coupon rate x Face value / 2
= 4.875% x $1,000 / 2
= $24.375

Therefore, the correct answer is (C) $24.375.

Six-Month U