ACT has an outstanding bond with a face value ( principal) of 1,000which would mature in 10 years. The bond pays 5% interest payable semi- annualy . If the yield ( effective) rate on similar bonds is 14%, what is the current market value of the bond?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 13Q: A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market...
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ACT has an outstanding bond with a face value ( principal) of 1,000which would mature in 10 years. The bond pays 5% interest payable semi- annualy .

If the yield ( effective) rate on similar bonds is 14%, what is the current market value of the bond?

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