Consider a 25​-year bond with a face value of $ 1 comma 000 that has a coupon rate of 5.9 %​, with semiannual payments.
a. What is the coupon payment for this​ bond?

To calculate the coupon payment for a bond, we can use the formula:

\[
\text{Coupon Payment} = \left( \frac{\text{Coupon Rate}}{2} \right) \times \text{Face Value}
\]

Here’s what we know:
- Face value = $1,000
- Coupon rate = 5.9% annually
- Payments are made semiannually, so we divide the coupon rate by 2.

\[
\text{Coupon Payment} = \left( \frac{5.9\%}{2} \right) \times 1000
\]
\[
\text{Coupon Payment} = (0.0295) \times 1000 = 29.50
\]

Thus, the semiannual coupon payment is **$29.50**.

Would you like further explanation or have any questions?

Here are 5 related questions you might find useful:
1. How would the coupon payment change if the bond had quarterly payments?
2. How do you calculate the total annual coupon payment?
3. How does the coupon payment affect the bond's yield?
4. What happens to the bond price if interest rates change after issuance?
5. How is the bond's present value determined?

**Tip:** Always check if the bond makes annual, semiannual, or quarterly payments, as it affects the coupon payment calculation.

Consider a 25-year bond with a face value of $1,000 that has a coupon rate of 5.9%, with semiannual payments. What is the coupon payment for this bond?

This guide explains how to calculate the semiannual coupon payment for a 25-year bond with a 5.9% coupon rate and a face value of $1,000. Learn the key concepts of bond valuation and how the coupon rate is divided for semiannual payments, leading to a $29.50 coupon payment.

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