If a corporate bond with face value of $1,000 has an interest rate of eight percent paid once a year for a term of 30 years,what is the size of the coupon payment?

Question

Quizplus · Accepted Answer

The size of the coupon payment is calculated as the face value multiplied by the annual interest rate, divided by the number of payments per year. In this case, since the interest is paid once a year, the coupon payment would be (1,000 x 0.08) / 1 = $80. Therefore, the correct answer is choice C.

If a Corporate Bond with Face Value of $1,000 Has