Bond Question beginning, question, payment, whether, mature

LiquidAssets10

Suppose a corporation issues bonds of say $100 with a flaoting rate coupon payable anually like
coupon rate = 5 year T note + 50 bps...
Maturity 10 years....
issued at say 1 Jan 2009 and will mature at 1 Jan 2019....
5 yr T note yield on 1 jan 2009 = 5%
5 yr T note yield on 1 july 2009 = 6%

So on 1st july 2009 there is coupon payment....
My question is whether the coupon payment will be $2.75 or $3.75.??.....that is the coupon is set at the beginning of the settlement period or at the end.....


Thanks in advance!

Penny-wenny

Oh Yes....i meant semi anually....
thanks ElanG

shootingstar

If it is set at the begining then why on July 1 it will be based on 6% rate it should be based on 5% rate right?why the ans is not 2.75%