Question

Atom Endeavour Co. issued $17 million face amount of 12.0% bonds when market interest rates were 13.38% for bonds of similar risk and other characteristics. Required: a. How much interest will be paid annually on these bonds

Answer 1

$2,040,000

Step-by-step explanation:

Annual Interest calculation

Interest = Par/Face Value × Coupon Rate

= $17,000,000 × 12.0%

= $2,040,000

Therefore, interest to be paid annually on these bonds is $2,040,000.