Question

Thompson Corporation is planning to issue $120,000, five-year, 6 percent bonds. Interest is payable semi-annually each...

Thompson Corporation is planning to issue $120,000, five-year, 6 percent bonds. Interest is payable semi-annually each June 30 and December 31. All of the bonds will be sold on July 1, 2017; they mature on June 30, 2022. Use Table 9C.1, Table 9C.2

Required:

Compute the issue (sale) price on July 1, 2017, if the yield is: (Round time value factor to 4 decimal places. Round the final answers to the nearest dollar amount.)

Issue price
a) 6 percent $
b) 2 percent $
c) 7 percent $
0 0
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Answer #1

Yield Rate Answers Rate Issued at Issue Price 6% Price 120001 (or) 120000 2% Price 142733 7% Price 115008Bond Valuation bond Face Value 120000 Bond Interest rate 6.0% Interest (120000*6%*6/12) Market Interest Rate 3600 6.0% Bond tBond Valuation bond Face Value Bond Interest rate Interest (120000*6%*6/12) Market Interest Rate Bond tenure Interest paymentBond Valuation bond Face Value Bond Interest rate Interest (120000*6%*6/12) Market Interest Rate 120000 6.0% 3600 7.0% Bond t

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