Question

Brief Exercise G-15

Brief Exercise G-15 Sheridan Company is about to issue $740,000 of 10-year bonds paying an 11% interest rate, with interest payable semiannually. The discount rate for such securities is 12%. Click here to view the factor table 1. Click here to view the factor table 2. Click here to view the factor table 3. Click here to view the factor table 4. In this case, how much can Sheridan expect to receive from the sale of these bonds? (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 5.25471. Round answer to o decimal places, e.g. 2,525.) Sheridan can expect to receive Click if you would like to Show Work for this question: Open Show Work

Answer 1

Sheridan can expect to receive = Present value of interest at 6%, 20 years + Present value of maturity amount at 6%, 20 years

= (740000*11%*6/12)*11.46992 + 740000*0.31180

= $697558