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- The University Club recently issued 1,500,000 of 10-year, 9% bonds at an effective interest rate of 10%. Bond interest is payable annually. You have been asked to calculate the issuance price of the bonds and prepare amortization schedules for any discount or premium. The worksheet BONDS has been provided to assist you. Note that the worksheet contains a scratch pad at the bottom that has been preprogrammed to automatically compute and display the relevant cash flows needed for bond pricing.Hello,I need help with the following question.On March 1, 2011, someone purchased 60K bond for 17 years at face value. The company regularly pays the annual interest rate due on its bonds.On March 1, 2016, the market interest rate is 8% and the purchaser is considering selling the bond. What is the market value of the bonds on March 1, 2016?Thank you very much for your help,MichaelAnswer the following question step by step using a financial calculator. Show all working: XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issue to raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate. Rounded to the nearest whole number.
- Dhalia Corporation issued $100 million bonds that mature in 30 years and have a 5% coupon rate that is paid annually. If the bonds were sold to yield 3.4%, determine the price of the bonds at the end of year 5. (Please provide your steps of calculation or keys applied on a financial calculator)Please answer Part A-B and included a short explanation of how you arrived at your answer for each part. A) You have just purchased a 17-year, $1,000 par value bond. The annual coupon rate on this bond is 10.9 percent paid each 6 months. If you expected to earn the market rate of 14.8 as return on this bond, how much did you pay for it?\ B) JRJ Corporation recently issued 10-year bonds at a price of $1,000. These bonds pay $88 in interest each six months. Their price has remained stable since they were issued, i.e., they still sell for $1,000. Due to additional financing needs, the firm wishes to issue new bonds that would have a maturity of 16 years, a par value of $1,000, and pay $68 in interest every six months. If both bonds have the same yield, how many new bonds must JRJ issue to raise $2,000,000 cash?(round your answer) C) Trickle Corporation's 21 percent coupon rate, semiannual payment, $1,000 par value bonds which mature in 24 years. The bonds currently sell for $1,230.51…12-3 Tango Enterprises has issued 100,000 coupon bonds, with maturity of eight years. Each bond sells for $1,075. The bonds pay semi-annual coupons of 9% on face value of $1,000. What is Tango’s cost of debt? Select one: a. 3.86% b. 6.57% c. 7.15% d. 7.28% e. 7.73%
- DIRECTIONS: Read and analyze the following problems and supply what is required and support it with necessary computations. 1. A company plans to issue a 25-year bond with a 12.5% interest rate, issued at a face value of P1, 000. The company is subject a 30% tax rate and expects a return on investment at 8%. Compute for the cost of debt issuance.Vitality Vancouver Inc. (VVI) has recently raised debt capital through long-term financing. The bond indenture includes issuing 8% coupon bonds on the market that are selling at $989, pay interest semi-annually, and mature in fifteen years. The company would like to issue additional $1 million in new fifteen-year bonds. VVI has another bond issue outstanding that pays a 7.5% coupon and matures in 14 years. The bond has a par value of $1,000 and a market price of $942.90. Interest is paid semiannually. The company evaluates the potential of issuing a third bond that pays an annual coupon of $35, has a face value of $1,000, matures in seven years, and has a yield to maturity of 8%. As a result of the recent financing, the CFO of the company is concerned about protective covenants that could hamper the future risk-taking ability of the firm. In particular, the bondholders reserve the right to force the repayment of the bonds prior to the maturity. VVI is also experiencing rapid growth.…Vitality Vancouver Inc. (VVI) has recently raised debt capital through long-term financing. The bond indenture includes issuing 8% coupon bonds on the market that are selling at $989, pay interest semi-annually, and mature in fifteen years. The company would like to issue additional $1 million in new fifteen-year bonds. VVI has another bond issue outstanding that pays a 7.5% coupon and matures in 14 years. The bond has a par value of $1,000 and a market price of $942.90. Interest is paid semiannually. The company evaluates the potential of issuing a third bond that pays an annual coupon of $35, has a face value of $1,000, matures in seven years, and has a yield to maturity of 8%. As a result of the recent financing, the CFO of the company is concerned about protective covenants that could hamper the future risk-taking ability of the firm. In particular, the bondholders reserve the right to force the repayment of the bonds prior to the maturity. VVI is also experiencing rapid growth.…
- Please show complete steps using both formula dn financial calculator. The Lone Star Company has $1,000 par value bonds outstanding at 9 percent interest. The bonds will mature in 19 years. Calculate your final answer using both the formula and financial calculator methods. Compute the current price of the bonds if the present yield to maturity is. (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) What is the bond price at. . . a. 6 percent b. 8 percent c. 12 percent.Bond Transactions Brand Company issued $1,140,000 face value, eight-year, 8% bonds on April 1, 2017, when the market rate of interest was 8%. Interest payments are due every October 1 and April 1. Brand uses a calendar year-end. Hopefully this is better, can you help me fill it out?Using these numbers, What bonds payable amount will Claire report on this year’s December 31 balance sheet? Claire Corporation is planning to issue bonds with a face value of $170,000 and a coupon rate of 10 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Claire uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 12 percent.(FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. 3. What bonds payable amount will Claire report on this year’s December 31 balance sheet?
