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EXAMPLE 1 A company has issued $5,000,000 worth of $5,000 bonds with a maturity date of 10 years. Each bond pays a quarterly dividend of
EXAMPLE 1 A company has issued $5,000,000 worth of $5,000 bonds with a maturity date of 10 years. Each bond pays a quarterly dividend of 6%. What are your payments per quarter if you bought one bond? BOND INTEREST 1 = (Face Value)(Bond Coupon rate)/# of payments per year or 1 = Vb/c 1 = Bond interest or sometimes called bond dividend V = Face value b = bond coupon rate C = how many times interest is paid per year
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