Question

Check my w Complete the below table to calculate the price of a $1 million bond issue under each of the following independent assumptions (FV of $1. PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.): 1. Maturity 10 years, interest paid annually, stated rate 10%, effective market) rate 12% 2. Maturity 10 years, interest paid semiannually stated rate 10%, effective market) rate 12% 3. Maturity 10 years, interest paid semiannually stated rate 12%, effective (market) rate 10% 4. Maturity 20 years, interest paid semiannually, stated rate 12%, effective market) rate 10%. 5. Maturity 20 years, interest paid semiannually, stated rate 12%, effective market) rate 12%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required) Required 4 Required (Round your answers to the nearest Maturity 10 years, Interest paid annually, stated rate 10%, effective market) rate 12% whole dollar). Table values are based on: Amount Present Value Cash Flow Interest Principal Price of bonds

Answer 1

Solution 1:

Computation of bond price
Table values are based on:
n=	10
i=	12.00%
Cash flow	Table Value	Amount	Present Value
Interest	5.65022	$100,000.00	$565,022
Principal	0.32197	$1,000,000.00	$321,970
Price of bonds			$886,992

Solution 2:

Computation of bond price
Table values are based on:
n=	20
i=	6.00%
Cash flow	Table Value	Amount	Present Value
Interest	11.46992	$50,000.00	$573,496
Principal	0.31180	$1,000,000.00	$311,800
Price of bonds			$885,296

Solution 3:

Computation of bond price
Table values are based on:
n=	20
i=	5.00%
Cash flow	Table Value	Amount	Present Value
Interest	12.46221	$60,000.00	$747,733
Principal	0.37689	$1,000,000.00	$376,890
Price of bonds			$1,124,623

solution 4:

Computation of bond price
Table values are based on:
n=	40
i=	5.00%
Cash flow	Table Value	Amount	Present Value
Interest	17.15909	$60,000.00	$1,029,545
Principal	0.14205	$1,000,000.00	$142,050
Price of bonds			$1,171,595

Solution 5:

Computation of bond price
Table values are based on:
n=	40
i=	6.00%
Cash flow	Table Value	Amount	Present Value
Interest	15.04630	$60,000.00	$902,778
Principal	0.09722	$1,000,000.00	$97,222
Price of bonds			$1,000,000