Questions: Assume that today's date is February 15, 2015. Robin Hood Inc. bond is an annual-coupon bond. Par value of the bond is 1,000. Calculate annual coupon interest payments. The answer should be calculated to two decimal places Company Price Coupon Rate Maturity Date YTM Current Yield Rating Robin Hood 113.994 10.949 2-15- 2040 - - D

Solution Steps

To calculate the annual coupon interest payments for the Robin Hood Inc. bond, we need to use the coupon rate and the par value of the bond. The formula for the annual coupon payment is:

\[ \text{Annual Coupon Payment} = \text{Coupon Rate} \times \text{Par Value} \]

Given the coupon rate is 10.949% and the par value is $1,000, we can plug these values into the formula to find the annual coupon payment.

We are given the following values:

• Coupon rate: \(10.949\%\)
• Par value of the bond: \(\$1,000\)

Convert the coupon rate from a percentage to a decimal: \[ \text{Coupon Rate} = \frac{10.949}{100} = 0.10949 \]

Use the formula for the annual coupon payment: \[ \text{Annual Coupon Payment} = \text{Coupon Rate} \times \text{Par Value} \] Substitute the given values: \[ \text{Annual Coupon Payment} = 0.10949 \times 1000 = 109.49 \]

Final Answer