Question
5 . A bond with a face value of $50,000 was issued for $46,750 on January 1, 2014. The Coupon rate of interest was 8%
5 . A bond with a face value of $50,000 was issued for $46,750 on January 1, 2014. The Coupon rate of interest was 8% a year and the market rate of interest was 10% when the bond was issued. There was no issue cost for the bond. Cash interest is paid annually. How much interest will be paid in cash on December 31, 2014?
a. $4,000
b. $5,000
c. $3,740
d. $4,675
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Essentials of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
9th edition
978-1259277214
