Svanur ehf. issued an extraordinary bond five years ago. This bond was for 8 years. The bond was 10 million. ISK at nominal value and it bears 6% interest. The first 4 years are only interest payments from the bond. After that, annual installments of the letter are paid ie. ISK 2.5 million per year, for four years, plus annual interest payments. Now 5 years have passed. There are three payments left on the bond. What are the bonds worth now if the required yield is 4.0 % ?

Svanur ehf. issued an extraordinary bond five years ago. This bond was for 8 years. The bond was 10 million. ISK at nominal value and it bears 6% interest. The first 4 years are only interest payments from the bond. After that, annual installments of the letter are paid ie. ISK 2.5 million per year, for four years, plus annual interest payments. Now 5 years have passed. There are three payments left on the bond. What are the bonds worth now if the required yield is 4.0 % ?

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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