Issue Price on January 1 is as shown below:
1. Issue Price is:
Table values are based on: | |||
n = 10 | |||
i = 5% | |||
Cash Flow | Table Value | Amount | Present Value |
Interest | 7.722 | 53,000 | 409,252 |
Principal | 0.614 | 1,060,000 | 650,748 |
Issue Price | 1,060,000 |
2. Issue Price is:
Table values are based on: | |||
n = 10 | |||
i = 4% | |||
Cash Flow | Table Value | Amount | Present Value |
Interest | 8.111 | 53,000 | 429,877 |
Principal | 0.676 | 1,060,000 | 716,098 |
Issue Price | 1,145,975 |
3. Issue Price is:
Table values are based on: | |||
n = 10 | |||
i = 6% | |||
Cash Flow | Table Value | Amount | Present Value |
Interest | 7.360 | 53,000 | 390,085 |
Principal | 0.558 | 1,060,000 | 591,898 |
Issue Price | 981,983 |
Case C: James Corporation is planning to issue $1,060,000 worth of bonds with a coupon rate...
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