chapter_10 - Chapter 10 Homework Problems E10-1 Bond...

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Chapter 10 Homework Problems E10-1 Bond Terminology: Fill in the Missing Blanks 1. The _____________ is the amount (a) payable at the maturity of the bond and (b) on which the periodic cash interest payments are computed. 2. _________ is another name for bond principal, or the maturity amount of a bond. 3. _________ is another name for principal, or the principal amount of the bond. 4. The ________ is the rate of cash interest per period stated in the bond contract. 5. A __________ is an unsecured bond; no assets are specifically pledged to guarantee repayment. 6. ______________ may be called for early retirement at the option of the issuer. 7. ______________ may be converted to other securities of the issuer (usually common stock). E10-5 Computing Issue Prices of Bonds for Three Cases Oxford Corporation is planning to issue $1,950,000 in bonds that mature in 7 years and pay 10 percent interest each December 31. All of the bonds will be sold on January 1, 2006. Required: Compute the issue (sale) price on January 1, 2006, for each of the following independent cases (show computations): Case A: Market (yield) rate, 9 percent. Case B: Market (yield) rate, 10 percent.
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This homework help was uploaded on 04/21/2008 for the course AEM 2210 taught by Professor Little,j. during the Fall '07 term at Cornell University (Engineering School).

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chapter_10 - Chapter 10 Homework Problems E10-1 Bond...

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