Given the following ATT Ltd.bond information:$1000 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 semi-annual coupon rate is 7.75%, so the annual coupon rate is 2 x 7.75% = 15.50%.

The bond's par value is $1000, and the annual coupon rate is 15.50%, so the bond pays $155 in interest each year.

Therefore, the correct answer is B) $77.50, which is half of the annual coupon payment.

Given the Following ATT Ltd