An entity issued 1 500 debentures with face value of R20 000 each. The coupon rate on the debentures is 12% paid annually in arrears. In order to speed the sale of the debentures, the directors decided to issue them at 10% discount. What amount of interest will be paid annually to an investor who bought 100 debentures?
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An entity issued 1 500 debentures with face value of R20 000 each. The coupon rate on the debentures is 12% paid annually in arrears. In order to speed the sale of the debentures, the directors decided to issue them at 10% discount.
What amount of interest will be paid annually to an investor who bought 100 debentures?
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- An entity issued 1 500 debentures with face value of R20 000 each. The coupon rate on the debentures is 12% paid annually in arrears. In order to speed the sale of the debentures, the directors decided to issue them at 10% discount. What amount of interest will be paid annually to an investor who bought 100 debentures?Do not copy from bartleby An entity issued 1 500 debentures with face value of R20 000 each. The coupon rate on the debentures is 12% paid annually in arrears. In order to speed the sale of the debentures, the directors decided to issue them at 10% discount. What amount of interest will be paid annually to an investor who bought 100 debentures?Siyar Ltd has issued 6% debentures worth 200,000 OMR having face value of OMR 100 each at a discount of 10%. The flotation cost payable is 5000.If the debenture is redeemable after 10 Years at par, calculate the Net proceeds? a. 90,000 b. 85,000 c. 100,0000 d. 110,000
- Jaison Ltd issues $10 million in 5-year debentures that pay interest every 6 months at a coupon rate of 10% per annum. The required market rate of return is 12% per annum. What is the issue price of the debentures (rounded to the nearest dollar)? Please provide all the calculations and do not just write the final answer. Also provide the journal entries for recording the debentures at the issue price.On 1 july 2018 BMw ltd issues $2 million in 10 year debentures that pay interest each six months at a coupon rate of 10 percent. At the time of issuing the securities, the market requires a rate of return of 12 %. Interest expense is determined using the effective interest method. Formula for PV of $1 in n periods = [1/1-(1+k)n/ k Formula for present value of annuity of $1 per period for n periods =[ 1-1/(1+k)n] / k where k is the discount rate expressed in decimal Required 1. Determine the issue price of the debenture 2. Provide the journal entries at 1 July 2018 and 30 June 2019Edgar Ltd issues $7 million in 6-year, 10%, semi-annual coupon debentures. The rate of return required by the market is 8% per annum. What is the journal entry to record the first payment of interest assuming using the effective-interest method to amortise any discount or premium (rounded to the nearest dollar)?
- On 1 July 2018 BMW Ltd issues $2 million in 10-year debentures that pay interest each six months at a coupon rate of 10 per cent. At the time of issuing the securities, the market requires a rate of return of 12 per cent. Interest expense is determined using the effective-interest method. Formula for PV of $1 in n periods =1/(1+k)n Formula for present value of annuity of $1 per period for n periods = (1-1/ (1+k)n ) ÷ k where k is discount rate expressed in decimal Required: (i) Determine the issue price of the debenture. (ii) Provide the journal entries at 1 July 2018 and 30 June 2019.An investor purchases 1000 shares of a company at GHS20 per share using his own equity of GHS10,000 and borrowing the rest from his broker at 20% per annum. If all the shares were sold one year later at GH¢28.50, calculate (a) the amount of money borrowed from the broker (b) the return on his equity taking into consideration all brokerage fees paid amounting 2.5% of the value of investment both for buying and selling of investment. (c) Return on his investment.On 1 July 2018 Bombo Ltd issues $2 million in six-year debentures that pay interest each six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent. Interest expense is determined using the effective-interest method.Required: Determine the issue price of the debenture.
- Jacob Engineering sells $300,000 of bonds to investors. The bonds have an 7% coupon rate and interest is paid semiannually. The bonds were sold to yield 10%. What periodic interest payment does Jacob Engineering make to its investors?Mark Motel's debt has a face value of $40 million, a coupon rate of 14% (paid semiannually), and expires in 12 years (at t = 12 . The current annual yield-to-maturity (stated) for all bonds of the company is 15%. Mark wishes to conserve cash for the next few years. To do this, Mark decides to issue new equity and use the proceeds to purchase the existing debt at the market price. The current stock price of Mark is $60 and there are 2 million shares outstanding. 1. How many shares should Mark issue to purchase the existing debt? Assume the decision to purchase the bond does not change the stock price. Instead, the company decides to issue a zero-coupon bond that matures at year 5, and use the proceeds to purchase the existing debt at the market price. 2. What is the face value of the zero-coupon bond that Mark needs to issue?ABC Corporation has decided to sell ₱1000 bonds which will pay semiannual dividends of ₱20 (2% per period) and will mature in 5 years. The bonds are sold at ₱830, but after brokers' fees and other expenses the company ends up receiving ₱760. Is the bond a good buy for an investor who expects a 9% return on his investments? Show manual complete solution with formulas.