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Sagot :
Answer:
d. 6%
Explanation:
cash paid = $300,000 per coupon
semiannual interest rate = coupon payment / face value = $300,000 / $10,000,000 = 0.03 = 3%
stated annual interest rate = semiannual interest rate x 2 = 3% x 2 = 6%
the interest expense is higher because it includes the amortization of bond discount
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