a) A bond makes semi-annual payments and has a maturity of 5 years with a coupon rate of 8% and a yield-to-maturity of 10%.
i. What is the coupon payment of this specific bond with a nominal value of R1 000
To calculate the coupon payment of a bond, you need to know the coupon rate and the face value of the bond.
The coupon rate is given as 8%, which means the bond pays 8% of its face value as a coupon payment. In this case, the face value of the bond is R1,000.
So, the coupon payment can be calculated as follows:
Coupon Payment = Coupon Rate * Face Value
Coupon Payment = 8% * R1,000
Coupon Payment = 0.08 * R1,000
Coupon Payment = R80
Therefore, the coupon payment of this specific bond with a nominal value of R1,000 is R80.