Question

Use the information for the question(s) below.

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?

		$60
		$40
		$80
		$120

Answer 1

Information provided:

Face value= future value= $1,000

Time= 15 years*2= 30 semi-annual periods

Coupon arte= 8%/2= 4%

The semi-annual coupon payment= Semi-annual coupon arte*Face value

                                                       = 0.04*1,000

                                                       = $40

This, the answer is option b.

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