Present Value of Bonds Payable; Discount Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder Co. issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%.
Determine the present value of the bonds payable, using the present value tables in Exhibit 8 and Exhibit 10.
Round to the nearest dollar. $
(note there will be slight difference in issue price calculation ,kindly use the factors as given | ||||||||
inn your question to get exact answer) | ||||||||
Bond characterstics | Amount | |||||||
1-a) | Principal | 25,000,000 | ||||||
interest | 875,000 | |||||||
Market interest rate | 4.5% | |||||||
periods to maturity | 10 | |||||||
issue price | 23,021,880 | answer | ||||||
Calculation of bond issue price | ||||||||
Where | ||||||||
i= | 4.50% | |||||||
t= | 10 | |||||||
principal | * | PV of $1 at 4.5% for 10 yrs = | ||||||
25,000,000 | * | 0.64393 | = | 16098250 | ||||
interest | * | PV of ordinary annuity at 4.5%= | ||||||
875000 | * | 7.91272 | = | 6923630 | ||||
bond issue price | 23021880 | |||||||
Present Value of Bonds Payable; Discount Pinder Co. produces and sells high-quality video equipment. To finance...
Present Value of Bonds Payable; Discount Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder Co. issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibit 8 and Exhibit 10. Round to the nearest dollar. $
eBook Calculator Print Item Present Value of Bonds Payable; Discount Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder Co. issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibit B and Exhibit 10. Round to the nearest dollar.
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.
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