A bond has a coupon rate of 6 percent and the bond makes semiannual coupon payments. The dollar amount of coupon interest received every six months is

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Quizplus · Accepted Answer

The coupon rate is expressed as an annual rate, so to calculate the semiannual coupon payment, we divide the coupon rate by 2. Therefore, the dollar amount of coupon interest received every six months is 6%/2 = 3%. If the bond has a face value of $1,000, then the semiannual coupon payment would be $1,000 x 3% = $30.

A Bond Has a Coupon Rate of 6 Percent and the Bond