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Ultimate Butter Popcorn issues 6%, 15-year bonds with a face amount of $53,000. The market interest...

Ultimate Butter Popcorn issues 6%, 15-year bonds with a face amount of $53,000. The market interest rate for bonds of similar risk and maturity is 5%. Interest is paid semiannually. At what price will the bonds issue?

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Answer #1
Par value of bonds 53000
Stated rate of interest 6%
Market rate of interest 5%
Semi annual cash interest 1590
Annuity factor (i=2.5% n=30) 20.93
Present value factor (i=2.5% n=30) 0.4767
Present value of Interest 33278.7
Present value of maturity 25265.1
ISSUE PRICE 58543.8
Issue Price of bonds: $ 58544
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