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Sheridan Company is about to issue $258,000 of 10-year bonds paying an 9% interest rate, with...

Sheridan Company is about to issue $258,000 of 10-year bonds paying an 9% 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 Sheridan expect to receive for the sale of these bonds? (Round answer to 0 decimal places, e.g. 2,575.)

Sheridan can expect to receive $

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Answer #1

Issue price of bonds = Present value of interest + Present value of maturity

= (258000*4.5%*13.59033)+(258000*0.45639) = $ 275,532

Sheridan can expect to receive $ 275,532

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