Debt Valuation: Interest-Bearing Debentures.  At the beginning of the year, Marshall Square, Inc. issued $100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent. Required Calculate the proceeds received by Marshall Square when the bonds were sold.

Financial Accounting: The Impact on Decision Makers
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Author:Gary A. Porter, Curtis L. Norton
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Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.3E: Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8%...
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Debt Valuation: Interest-Bearing Debentures.  At the beginning of the year, Marshall Square, Inc. issued

$100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent.

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  1. Calculate the proceeds received by Marshall Square when the bonds were sold.
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