Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. What is the market price?
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Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%. What is the market price?
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- 2. DEF Company will issue $8,000,000 in 10%, 10-year bonds when the market rate of interest is 7%. Interest is paid semiannually. Required: a. Will this interest structure result in a Premium for DEF company or a Discount? b. How much cash will be received from the issuance of the bond? c. How much will the semi-annual interest payment be on the bond?Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%.Bond Issuance. Sander Corporation issues a P300,000, 16 percent, 10-year bond at 108. REQUIREMENTS: (a) What is the maturity value? (b) What is the annual cash interest payment? (c) What are the proceeds the company receives upon issuance of the bond? (d) What is the amount of the premium? (e) What is the annual premium amortization?
- The market price of an $960000, ten-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10% isQuestion 2: ABC Trucking has issued an %14, 10-year bond that pays interest semiannually. If the market prices the bond to yield an effective annual rate of %13 . What is the price of the bond?the following features: • Coupon rate of interest (paid annually): 10 percent • Principal: $1,000 • Term to maturity: 8 years a. What will the holder receive when the bond matures? |-Select- b. If the current rate of interest on comparable debt is 7 percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. Would you expect the firm to call this bond? Why? -Select- v, since the bond is selling for a-Select- v. c. If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for eight years if the funds earn 7 percent annually and there is $80 million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar.
- If the market rate of interest is 10%, a $10,000, 12%, 10-year bond that pays interest semiannually would sell at an amount ☐ a. equal to the face value b. greater than face value c. that cannot be determined d. less than face valueDetermine the market price of a $700,000, eight-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10%.What is the present value of a 10-year bond that has 4 years left-to-maturity (N), 7% annual required rate (I/Y) and 8% annual payment (PMT)? (Note: assume future value, FV, is $1000).
- Bond A has the following terms: (Use semi- annual interest payments if applicable.) Coupon rate of interest: 10 percent Principle: $1,000 Term to maturity: 8 years Bond B has the following terms: (Use semi- annual interest payments if applicable.) Coupon rate of interest: 5 percent Principle: $1,000 Term to maturity: 8 years What should be the price of each bond if interest rates are 10 percent? What will be the price of each bond if, after five years have elapsed, interest rates are 10 percent? What will be the price of each bond if, after eight years have elapsed, interest rates are 8 percent?Use the present value tables in Appendix B to calculate the issue price of a $300,000 bond issue in each of the following independent cases. Assume interest is paid semiannually. a. A 10-year, 8 percent bond issue; the market interest rate is 10 percent.b. A 10-year, 8 percent bond issue; the market interest rate is 6 percent.c. A 10-year, 10 percent bond issue; the market interest rate is 8 percent.d. A 20-year, 10 percent bond issue; the market interest rate is 12 percent.e. A 20-year, 10 percent bond issue; the market interest rate is 6 percentQuestion 2: ABC Trucking has issued an 14-percent, 10-year bond that pays interest semiannually. If the market prices the bond to yield an effective annual rate of 13 percent. What is the price of the bond? (5 POİNT).