A corporation issued a $400,000, 6 % coupon rate, 10 year semi-annual bond. If the yield...

Question

Question

Answer 1

Answer #1

Solution:

The Answer is $ 465,416.80

Present value of interest payments	$ 196,216.80
[$12,000 x 16.3514 PV annuity factor (4%, 10 years, semi annual bond)]
Present value of the face value	$ 269,200.00
[$400,000 x 0.6730 PV ordinary factor (4%, 10 years)]
Total present value / selling price	$ 465,416.80

So, Remaining options are Incorrect.

Answer 2

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