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Question

Issue Price

The following terms relate to independent bond issues:

  1. 480 bonds; $1,000 face value;

8% stated rate; 5 years; annual interest payments

  • 480 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments
  • 820 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments
  • 2,120 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments
  • Use the appropriate present value table:

    PV of $1 and PV of Annuity of $1

    Required:

    Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar.

    SituationSelling Price of the Bond Issue

    a.$

    b.$

    c.$

    d.$

    Top Answer

    (a) The selling price of bond is $924.16. (b) The selling... View the full answer

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