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About coupon payment in accrued interest ?

Posted on: 15th Sep, 2007 10:13 pm
If 6.5% coupon paid semi-annually about bond. The next coupon payment is next month.
Why is the semi-annual coupon payment rate = 6.5% / 2 = 3.25% ?
My meaning is why need coupon payment rate to be divided 2 ?please tell me ,thanks advance.
Hi Liaoyu,

Welcome to the forum.

If a bond is purchased semi-annually through coupon payment, it means that the interest payment is made twice each year. So the interest rate is divided by 2 because 2 is the number of periods used in calculating the coupon payment.
Posted on: 16th Sep, 2007 08:49 pm
thanks, larry. according to your help, and I have refered to some reference books. Now, I have understood.
Posted on: 17th Sep, 2007 07:35 am
you are welcome.
Posted on: 18th Sep, 2007 12:18 am
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