How much can be paid for a P100,000, 10%pa , 20 year bond with interest paid annually, 8years after its purchase? Assume that thepurchaser will be satisfied with 6% pa interest?O P130,825O P 133,872O P131,825O P133,535

Par value = P 100,000 Coupon rate = 10% Coupon amount = 100,000*0.10 = P 10,000 Years to maturity…

Answered: How much can be paid for a P100,000,…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

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Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.
Bond Valuation and Interest Rate Risk The Garraty Company has two bond issues outstanding. Both bonds pay 100 annual interest plus 1,000 at maturity. Bond L has a maturity of 15 years, and Bond S has a maturity of 1 year. a. What will be the value of each of these bonds when the going rate of interest is (1) 5%, (2) 8%, and (3) 12%? Assume that there is only one more interest payment to be made on Bond S. b. Why does the longer-term (15-year) bond fluctuate more when interest rates change than does the shorter-term bond (1 year)?
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
A P5000.00, 10-year, 8% bond that pays interest annually was purchased four years ago with a discount of P152.00. If the bond is sold today for P4750.00, determine a) the rate of return realized by the owner; (Ans. 7.8%) b) the rate of return realized by the purchaser if he holds on to the bond until maturity. (Ans. 9.1%)
A P5000.00 debenture bond that matures in 10 years pays P150.00 every three months. If an investor who bought the bond computed a nominal return of 10% compounded quarterly, determine a) the bond rate; b) the bond’s purchase price. (Ans. 12%; P5627.57)
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engineering economy A P500,000, 10-year bond provides for annual interest payments based on a bond rateof 15%. If the bond is redeemed at the end of its full life at par value so as to yield 13%to the investor, what was the original purchase price?
What would be the selling price of a 10-year bond with a face value of P100.000, interest at 20% which is paid quarterly if an investor desires to earn a 16% nominal interest on P100,000 worth of these bonds? a. P82 836 b. P119.793 c. P112 835 d. P94,287
Blake Company has a P30 million, 12 percent bond issue outstanding with 20 years remaining. The call premium is 7 percent of face value. A new 20-year bond issue for P30 million can be issued at a 10 percent interest rate. Flotation costs related to the new issue are P800,000. What is the net present value? CHOOSE THE CORRECT LETTER A. P5,108,160.00B. P2,900,000.00C. P2,208,160.00D. P1,208,160.00E. None of the above
A $200,000 bond having a bond rate of 8% payable annually is purchased for $190,500 and kept for 6 years, at which time it is sold. How much should it sell for in order to yield a 7% effective annual return on the investment? a. $168,000 b. $171,000 c. $174,000 d. $177,000.
1. What would be the selling price of a 10-year bond with a face value of P100,000,interest at 20% which is paid quarterly if an investor desires to earn a 16% nominali nterest on P100,000 worth of these bonds? P119,793 P82,836 P94,287 P112,835

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How much can be paid for a P100,000, 10% pa , 20 year bond with interest paid annually, 8 years after its purchase? Assume that the purchaser will be satisfied with 6% pa interest? O P130,825 O P 133,872 O P131,825 P133,535