A Bond with 23 Years to Maturity Is Selling for $991

question 46

Multiple Choice

A bond with 23 years to maturity is selling for $991 and has a yield to maturity of 8.12 percent. If this bond pays its coupon payments semiannually and par value is $1,000, what is the bond's annual coupon rate?

• A) 7.45 percent
• B) 8.03 percent
• C) 9.39 percent
• D) 10.82 percent

---

Definitions:

Traceable Fixed Costs

Fixed costs that can be directly associated with a specific business segment or area.

Net Operating Income

The profit generated from a company's everyday business operations, indicating the company's ability to generate income through sales after covering operating expenses.

Total Common Corporate Costs

Overhead or administrative expenses shared across the various divisions or departments of a company.

Fixed Manufacturing Overhead

The set costs associated with operating a manufacturing facility that do not vary with the level of production, such as rent, insurance, and salaries of permanent staff.