Which Of The Following Is Used To Compute Bond Cash Interest Payments?
Which Of The Following Is Used To Compute Bond Cash Interest Payments?
Answer:
To compute bond cash interest payments, the following formula is typically used:
The formula for calculating bond cash interest payments is:
\text{Bond Cash Interest Payment} = \text{Face Value of the Bond} \times \text{Coupon Rate}
In this formula, the face value of the bond is the amount of money the bondholder will receive once the bond matures, and the coupon rate is the annual interest rate that the bond issuer promises to pay to the bondholder. By multiplying these two values, you can calculate the amount of cash interest payments the bondholder will receive.