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7 April, 06:19

Morgan company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. the current market rate is 8%. the amount paid to the bondholders for each semiannual interest payment is:

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  1. 7 April, 06:24
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    Calculation of the amount paid to the bondholders for each semiannual interest payment:

    Formula used:

    Semiannual interest payment = Bond's Face value * Bond's Interest rate / 2

    We know the following information:

    Bond's Face value = $750,000

    Bond's Interest rate = 9%

    Hence, Semiannual interest payment = 750000*9%/2 = $33,750
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