Asked Oct 10, 2019

On January 1, 2020, Garner Hot Rods issued $2,000,000 of 6%, 10-year bonds. Interest is payable semiannually on June 30 and December 31.


What is the issue price if the bonds are sold to yield 8%? Follow the format shown in Present Value tables as you complete the requirement. If required, round your calculations and final answer to the nearest whole dollar.


Expert Answer

Step 1

Compute coupon payment for six months per...


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Number of periods is 20 (10x2). 6% Coupon payment = $2,000,000 x - 2 = $60,000


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