A company issues 9%,20-year bonds with a par value of $750,000.The current market rate is 9%.The amount of interest owed to the bondholders for each semiannual interest payment is.
A)$0
B)$33,750
C)$67,500
D)$750,000
E)$1,550,000

Question

Quizplus · Accepted Answer

The correct answer is B because the amount of interest owed to the bondholders for each semiannual interest payment is $33,750. This is calculated by taking the par value of the bonds ($750,000) and multiplying it by the annual interest rate (9%) and then dividing by 2 (since the interest payments are made semiannually).

A Company Issues 9%,20-Year Bonds with a Par Value of $750,000.The