What would you pay for a $195,000 debenture bond that matures in 15 years and pays $9,750 a year in interest if you wanted to earna yield of:Click here to view factor tables.(a)3%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.)Amount to paytA$

Introduction: Debenture bonds are issued by the organization to borrow money for its business…

Answered: What would you pay for a $195,000…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 11P

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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?
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.
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
What would you pay for a $205,000 debenture bond that matures in 15 years and pays $10,250 a year in interest if you wanted to earn a yield of 2%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
Compute the specified quantity. A 7 year bond costs $30,000 and will pay a total of $2,000 in interest over its lifetime. What is its annual interest rate r (as a percent)? (Round your answer to three decimal places.) r =
Compute the specified quantity. A 7 year bond costs $30,000 and will pay a total of $3,600 in interest over its lifetime. What is its annual interest rate r (as a percent)? (Round your answer to three decimal places.)
Compute the specified quantity.A 4-year bond costs $20,000 and will pay a total of $2,800 in interest over its lifetime. What is its annual interest rate r? (Round your answer to three decimal places.)r = ___%

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