Park Corporation issued 10-year bonds with a face value of $10,000,000. The face rate of interest...
Park Corporation issued 10-year bonds with a face value of $10,000,000. The face rate of interest on the bonds was 8%, and Park agreed to make semiannual payments. The market rate of interest at the time the bonds were issued was 6%. How much cash did Park Corporation receive from the issuance of the bonds?
Group of answer choices
$10,000,000
$11,487,747
$14,265,101
$11,472,017
Homework Answers
Issue price of bonds = Present value of interest+Present value of maturity
= (10000000*4%*14.8775)+(10000000*0.5537)
Issue price of bonds = 11487747
So answer is b) $11487747
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