A firm has issued P1,000 bonds with a 10-year maturity and a face value of P1,000,000. Quarterly interest of 16 percent is paid. What would the selling price have to be if an investor wanted to earn 20% nominal interest on P100,000 worth of these bonds?

A firm has issued P1,000 bonds with a 10-year maturity and a face value of P1,000,000. Quarterly interest of 16 percent is paid. What would the selling price have to be if an investor wanted to earn 20% nominal interest on P100,000 worth of these bonds?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...

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A firm has issued P1,000 bonds with a 10-year maturity and a face value of P1,000,000.
Quarterly interest of 16 percent is paid. What would the selling price have to be if an
investor wanted to earn 20% nominal interest on P100,000 worth of these bonds?

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