Homework_10_solutions - Homework Manager Solutions E104....

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Homework Manager Solutions E10–4. CASE A: $100,000 x 0.6806. ........................................................ $ 68,060 $8,000 x 3.9927. ............................................................ 31,942 Issue price (market and stated rate same). ................... $100,002 (at par; $2 rounding error) CASE B: $100,000 x 0.7473. ........................................................ $ 74,730 $8,000 x 4.2124. ............................................................ 33,699 Issue price (market rate less than stated rate). ............. $108,429 (at a premium) CASE C: $100,000 x 0.6209. ........................................................ $ 62,090 $8,000 x 3.7908. ............................................................ 30,326 Issue price (market rate more than stated rate). ............ $ 92,416 (at a discount) E10–5. CASE A: $500,000 x 0.5584. ........................................................ $ 279,200 $35,000 x 7.3601. .......................................................... 257,604 Issue price (market rate less than stated rate). ............. $536,804 (at a premium) CASE B: $500,000 x 0.5083. ........................................................ $ 254,150 $35,000 x 7.0236. .......................................................... 245,826 Issue price (market rate and stated rate same). ............ $499,976 (at par, $24 CASE C: rounding error) $500,000 x 0.4632. ........................................................ $ 231,600
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Homework_10_solutions - Homework Manager Solutions E104....

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