On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1-a. If the market rate is 7%, calculate the issue price (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use appropriate factor(s) from tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to decimal place. Round your final answers to the nearest whole dollar.) Bond Characteristics Amount Face amount $4 40,000,000 Interest payment Periods to maturity Market interest rate Issue price
On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1-a. If the market rate is 7%, calculate the issue price (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use appropriate factor(s) from tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to decimal place. Round your final answers to the nearest whole dollar.) Bond Characteristics Amount Face amount $4 40,000,000 Interest payment Periods to maturity Market interest rate Issue price
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 3P
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![[The following information applies to the questions displayed below]
On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in
15 years, with interest payable semiannually on June 30 and December 31 each year.
Required:
1-a. If the market rate is 7%, calculate the issue price (PV of $1. PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the
tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to 1
decimal place. Round your final answers to the nearest whole dollar.)
Bond Characteristics
Amount
Face amount
40,000,000
Interest payment
Periods to maturity
Market interest rate
Issue price
1-b. The bonds will issue at
OA Discount
OA Premium
O Face amount](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F795e60d9-3b88-497f-9ce1-b8440a91a1ae%2Ffa78669a-af0a-4a11-aefe-32a5a72fbf05%2Fwdf6aq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below]
On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in
15 years, with interest payable semiannually on June 30 and December 31 each year.
Required:
1-a. If the market rate is 7%, calculate the issue price (PV of $1. PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the
tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to 1
decimal place. Round your final answers to the nearest whole dollar.)
Bond Characteristics
Amount
Face amount
40,000,000
Interest payment
Periods to maturity
Market interest rate
Issue price
1-b. The bonds will issue at
OA Discount
OA Premium
O Face amount
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