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The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years.The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually.
-How much will each semiannual coupon payment be?
A)$60
B)$40
C)$120
D)$80

Question

Quizplus · Accepted Answer

The semiannual coupon payment is calculated by taking the annual coupon rate (8% of $1000 = $80) and dividing it by 2, since payments are made semiannually. Thus, each payment is $40.

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