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    shawna31082@hotmail.com's Avatar
    shawna31082@hotmail.com Posts: 1, Reputation: 1
    New Member
     
    #1

    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
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    #2

    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
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    #3

    Apr 12, 2008, 09:20 AM
    For this question, were the bonds issued at a premium or discount?
    -And-
    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
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    #4

    Nov 18, 2011, 10:54 AM
    4400000

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