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Ask's Avatar Posts: 1, Reputation: 1
    New Member

    Feb 6, 2006, 07:47 PM
    Help w/ bonds and interest on them
    You don't have to give me the answer if you don't want, I would really appreciate knowing how to figure this problem out.

    Doran Co. issued $40 million face amount of 11% bonds when market interest rates were 11.14% for bonds of similar risk and other characteristics.

    A. How much interest will be paid annually on these bonds?:p
    reinsuranc's Avatar
    reinsuranc Posts: 92, Reputation: 6
    Junior Member

    Feb 8, 2006, 10:41 PM
    The annual interest is the face value times the coupon rate: $40 million times 11%.

    The market interest rate affects the price of the bond, but not the annual interest.
    durabobbe's Avatar
    durabobbe Posts: 1, Reputation: 1
    New Member

    Apr 12, 2008, 09:20 AM
    For this question, were the bonds issued at a premium or discount?
    Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? Why?
    BigHazard's Avatar
    BigHazard Posts: 1, Reputation: 1
    New Member

    Nov 18, 2011, 10:54 AM

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