Computing Issue Prices of Bonds for Three Cases
James Corporation is planning to issue $500.000 worth of bonds that mature in 10 years and pay 6 percent interest each June 30 and December 31. All of the bonds will be sold on January 1. 2011.
Required:
Compute the issue (sale) price on January 1, 2011, for each of the following independent cases (show computations):
a. Case A: Market (yield) rate, 4 percent.
b. Case B: Market (yield) rate, 6 percent.
c. Case C: Market (yield) rate, 8 percent.
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