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For Questions 39-41, please use the following example: Bank of America wants to issue a $1,000,000 bond. The rate on debt issued by comparable
For Questions 39-41, please use the following example: Bank of America wants to issue a $1,000,000 bond. The rate on debt issued by comparable company Citigroup is 12%. Thus, Bank of America will pay 12% per year in interest on monies borrowed for 30 years. Bank of America repays the principal at the end of year 30. 39) What is Bank of America's coupon payment? a) $1,000,000 b) 12% c) 30 years d) $120,000 e) Not able to calculate 40) What is the par value of Bank of America's bond? a) $1,000,000 b) 12% c) 30 years d) $120,000 e) Not able to calculate
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