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A company has issued a bond having face value of ₹ 100,000, carrying an annual dividends at 8% and maturing in 12 years. If the prevailing market rate of interest is 9%, then annual dividend is

Solution

✅ Correct Option: 3

The annual dividend on a bond is the coupon rate applied to the face value; the prevailing market rate affects only the bond's price, not the dividend paid.

Dividend =8%= 8\% of 100000=8000100000 = 8000.

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