Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond (rounded to nearest whole dollar)?
Face Value = $100,000
Coupon rate = 6%,
Semi annual coupon amount = $100,000 * 6%*6/12 = $3,000
Market rate = 7%, Semi-Annual rate = 3.50%
Issue price of the bond = Present value of all cash flows arising from the bond
Issue price of the bond = [$3,000 * PVAF(3.5% , 10 periods)] + [$100,000 / (1.035)10]
Issue price of the bond = [$3,000 * 8.31660532] + [$100,000 * 0.708918814]
Issue price of the bond = $24,949.82 + $70,891.88
Issue price of the bond = $95,841.70 or
Issue price of the bond = $95,842 (rounded off to nearest whole number)
Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6%...
Underwater Experiences issues a bond due in 5 years with a stated interest rate of 6% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond (rounded to nearest whole dollar)? (Use a financial calculator or Excel) Multiple Choice $100,000. $104,265. $71,906. $95,842.
Mountain Excursions issues a bond due in 10 years with a stated interest rate of 7% and a face value of $200,000. Interest payments are made semi-annually. The market rate for this type of bond is 6%. What is the issue price of the bond (rounded to nearest whole dollar)?
Hillside Excursions issues bonds due in 12 years with a stated interest rate of 11% and a face value of $100,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. Using a financial calculator or Excel, calculate the issue price of the bonds. A) 93,320 B) 106,592 C) 122,870 D) 100,000
Seaside issues a bond with a stated interest rate of 10%, the face value of $50,000, and due in 5 years. Interest payments are made semi-annually. The market rate for this type of bond is 12%. What is the issue price of the bond?
Ocean Adventures issues bonds due in 10 years with a stated interest rate of 8% and a face value of $450,000. Interest payments are made semi- annually. The market rate for this type of bond is 7%. Using a financial calculator or Excel, what is the issue price of the bonds? Multiple Choice Ο $450,000. Ο $420,732. Ο $490,934. Ο $481,978.
Question 17 4 pts The company issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500.000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. What is the issue price of the bond? Use Factor Tables or Financial Calculator 5464,471 5537,194 $500,000 $359,528.
Mountain Excursions issues bonds due in 15 years with a stated interest rate of 11% and a face value of $180,000. Interest payments are made semi-annually. The market rate for this type of bond is 12%. Using a financial calculator or Excel, calculate the issue price of the bonds. Multiple Choice $193,835. $167,612. $180,000. $100,313.
Mountain Excursions issues bonds due in 12 years with a stated interest rate of 12% and a face value of $120,000. Interest payments are made semi-annually. The market rate for this type of bond is 13%. Using a financial calculator or Excel, calculate the issue price of the bonds. A) 70,292 B) 112,806 C) 127,891 D) 120,000
Air Destinations issues bonds due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 7%. Using present value tables, calculate the issue price of the bonds. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $537,194. $464,471. $359,528. $500,000.
Mountain Excursions issues bonds due in 10 years with a stated interest rate of 11% and a face value of $140,000. Interest payments are made semi- annually. The market rate for this type of bond is 12%. Using a financial calculator or Excel, calculate the issue price of the bonds. Multiple Choice $131,971 0 $148,724 0 $140,000 $88,583