3. On January 1, Russel Corp. issued 8-year bonds with a face value of $100,000 and a stated annual coupon rate of 6%, payable semiannually on June 30 and Dec. 31 of each year. The bonds were sold to yield an annual effective market rate of 8%. Present values interest factors from time-value-of-money tables are shown below. Note: If you use financial calculators or Excel instead of the interest factors, the rounding error could be as much as $10. These bonds will sell for a total price of: (A) $88,356 (B) $99,983 (C) $112,544 (D) $81,330 (E) None of the above.
3. On January 1, Russel Corp. issued 8-year bonds with a face value of $100,000 and a stated annual coupon rate of 6%, payable semiannually on June 30 and Dec. 31 of each year. The bonds were sold to yield an annual effective market rate of 8%. Present values interest factors from time-value-of-money tables are shown below. Note: If you use financial calculators or Excel instead of the interest factors, the rounding error could be as much as $10. These bonds will sell for a total price of: (A) $88,356 (B) $99,983 (C) $112,544 (D) $81,330 (E) None of the above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![3. On January 1, Russel Corp. issued 8-year bonds with a face value of $100,000 and a stated annual coupon rate of 6%,
payable semiannually on June 30 and Dec. 31 of each year. The bonds were sold to yield an annual effective market rate
of 8%. Present values interest factors from time-value-of-money tables are shown below. Note: If you use financial
calculators or Excel instead of the interest factors, the rounding error could be as much as $10.
These bonds will sell for a total price of:
(A) $88,356
(B) $99,983
(C) $112,544
(D) $81,330
(E) None of the above.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5652a928-1100-4472-b601-41e4f9990618%2F92b56de2-6645-4544-8214-d00ebbe1fd51%2Fic38kyo_processed.png&w=3840&q=75)
Transcribed Image Text:3. On January 1, Russel Corp. issued 8-year bonds with a face value of $100,000 and a stated annual coupon rate of 6%,
payable semiannually on June 30 and Dec. 31 of each year. The bonds were sold to yield an annual effective market rate
of 8%. Present values interest factors from time-value-of-money tables are shown below. Note: If you use financial
calculators or Excel instead of the interest factors, the rounding error could be as much as $10.
These bonds will sell for a total price of:
(A) $88,356
(B) $99,983
(C) $112,544
(D) $81,330
(E) None of the above.
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