The 7.2 percent bond of Blackford, Inc. has a yield to maturity of 7.3 percent

The 7.2 percent bond of Blackford, Inc. has a yield to maturity of 7.3 percent. The bond matures in seven years, has a face value of $1,000, and pays semiannual interest payments. What is the amount of each coupon payment?

$30.00
$36.00
$72.00
$34.10

A bond's annual interest divided by its face value is referred to as the:

coupon rate
market rate.
current yield.
yield-to-maturity.
call rate.

Solutions

Expert Solution

Coupon payment = Face value * coupon rate / number of payments in a year

Coupon payment = 1,000 * 0.072/2

Coupon payment = $36

Annual interest/Face value = Coupon rate

jeff jeffy answered 2 years ago

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