Given the following ATT Ltd.bond information: $10 000 par value,maturity Dec 22,2023,semi-annual coupon 7.75 percent,price 105.50 and yield 7.4 percent.How much interest does it pay annually?

Question

Quizplus · Accepted Answer

The annual interest payment can be calculated as follows:
Coupon rate = 7.75% of $10,000 = $775
Since the bond pays semi-annual coupon payments, the interest payment per period is $775/2 = $387.50
Therefore, the annual interest payment is $387.50 * 2 = $775.
Hence, the correct option is B.

Given the Following ATT Ltd