Question
Issue Price
The following terms relate to independent bond issues:
- 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