1. Adonis Corporation issued 10-year, 7% bonds with a par value of $100,000. Interest is paid...
1. Adonis Corporation issued 10-year, 7% bonds with a par value of $100,000. Interest is paid semiannually. The market rate on the issue date was 6%. Adonis received $107,441 in cash proceeds. Which of the following statements is true?
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Adonis must pay $100,000 at maturity plus 20 interest payments of $3,500 each.
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Adonis must pay $107,441 at maturity and no interest payments.
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Adonis must pay $100,000 at maturity plus 20 interest payments of $3,000 each.
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Adonis must pay $107,441 at maturity plus 20 interest payments of $3,500 each.
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Adonis must pay $100,000 at maturity and no interest payments.
Homework Answers
Answer :
A) Adonis Must pay $100,000 at Maturity Plus 20 Interest Paymnets of $3,500
Semiannual Interest Paymnet = $100,000*7%*6/12 = $3,500
At MAturiy bond face Value must Pay = $100,000
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