Homework Answers
Answer-------------$308,350
Working
| Bonds issue price is calculated by ADDING the: |
| Discounted face value of bonds payable at market rate of interest, and |
| Discounted Interest payments amount (during the lifetime) at market rate of interest. |
.
| Annual Rate | Applicable rate | Face Value | $ 326,000 | ||
| Market Rate | 12.00% | 6.00% | Term (in years) | 9 | |
| Coupon Rate | 11.00% | 5.50% | Total no. of interest payments | 18 |
.
| Calculation of Issue price of Bond | ||||||||
| Bond Face Value | Market Interest rate (applicable for period/term) | |||||||
| PV of | $ 326,000 | at | 6.00% | Interest rate for | 18 | term payments | ||
| PV of $1 | 0.35034 | |||||||
| PV of | $ 326,000 | = | $ 326,000 | x | 0.35034 | = | $ 114,211 | A |
| Interest payable per term | at | 5.50% | on | $ 326,000 | ||||
| Interest payable per term | $ 17,930 | |||||||
| PVAF of 1$ | for | 6.00% | Interest rate for | 18 | term payments | |||
| PVAF of 1$ | 10.82760 | |||||||
| PV of Interest payments | = | $ 17,930 | x | 10.82760 | = | $ 194,139 | B | |
| Bond Value (A+B) | $ 308,350 | |||||||
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Assignment CALCULATOR FULL SCREEN PRINTER VERSION URCES Brief Exercise A-14 Dempsey Railroad Co. is about to...
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Question:
How mych can Dempsey expect to receive for the sale of these
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Dempsey Railroad Co. is about to issue $266,000 of 7-year bonds paying an 12% interest rate,...
Dempsey Railroad Co. is about to issue $266,000 of 7-year bonds
paying an 12% interest rate, with interest payable semiannually.
The discount rate for such securities is 10%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
How much can Dempsey expect to receive for the sale of these bonds?
(Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
$
Dempsey Railroad Co. is about to issue $334,000 of 8-year bonds paying an 10% interest rate,...
Dempsey Railroad Co. is about to issue $334,000 of 8-year bonds
paying an 10% interest rate, with interest payable semiannually.
The discount rate for such securities is 8%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
How much can Dempsey expect to receive for the sale of these bonds?
(Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
$
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The discount rate for such securities is 12%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
In this case, how much can Dempsey expect to receive from the sale
of these bonds? (Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
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Dempsey Railroad Co. is about to issue $304,000 of 6-year bonds
paying an 9% interest rate, with interest payable semiannually. The
discount rate for such securities is 10%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
In this case, how much can Dempsey expect to receive from the sale
of these bonds? (Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
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paying an 12% interest rate, with interest payable semiannually.
The discount rate for such securities is 8%
Question:
How mych can Dempsey expect to receive for the sale of these
bonds?
Dempsey can expect to recieve $____
CALCULATOR FULL SCREEN PRINTER VERSION BACK Brief Exercise A-13 Dempsey Railroad Co. is about to issue $286,000 of 9-year bonds paying an 12% Interest rate, with interest payable semiannually. The discount...
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Dempsey Railroad Co. is about to issue $266,000 of 7-year bonds
paying an 12% interest rate, with interest payable semiannually.
The discount rate for such securities is 10%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
How much can Dempsey expect to receive for the sale of these bonds?
(Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
$
Dempsey Railroad Co. is about to issue $334,000 of 8-year bonds
paying an 10% interest rate, with interest payable semiannually.
The discount rate for such securities is 8%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
How much can Dempsey expect to receive for the sale of these bonds?
(Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
$
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paying an 11% interest rate, with interest payable semiannually.
The discount rate for such securities is 12%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
In this case, how much can Dempsey expect to receive from the sale
of these bonds? (Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
$
Dempsey Railroad Co. is about to issue $304,000 of 6-year bonds
paying an 9% interest rate, with interest payable semiannually. The
discount rate for such securities is 10%.
Click here to view the factor table.
(For calculation purposes, use 5 decimal places as
displayed in the factor table provided.)
In this case, how much can Dempsey expect to receive from the sale
of these bonds? (Round answer to 0 decimal places, e.g.
2,525.)
Dempsey can expect to receive
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