On January 1, 2021, Wild Rapids Water Park issues $40.9 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. 2-a. If the market rate is 8%, calculate the issue price. (FV 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 Interest payment Periods to maturity Market interest rate Issue price $ 40,900,000 2-b. The bonds will issue at OA Discount OA Premium O Face amount
On January 1, 2021, Wild Rapids Water Park issues $40.9 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. 2-a. If the market rate is 8%, calculate the issue price. (FV 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 Interest payment Periods to maturity Market interest rate Issue price $ 40,900,000 2-b. The bonds will issue at OA Discount OA Premium O Face amount
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Required information
[The following information applies to the questions displayed below.]
On January 1, 2021, Wild Rapids Water Park issues $40.9 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.
2-a. If the market rate is 8%, calculate the issue price. (FV 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
Interest payment
$ 40,900,000
Periods to maturity
Market interest rate
Issue price
2-b. The bonds will issue at
O A Discount
OA Premium
O Face amount](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e040603-84c5-4f6a-8e32-d8a2833a4202%2F203f0c35-69c4-47ce-a5d9-3ed80b167760%2F7frtyou_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
On January 1, 2021, Wild Rapids Water Park issues $40.9 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.
2-a. If the market rate is 8%, calculate the issue price. (FV 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
Interest payment
$ 40,900,000
Periods to maturity
Market interest rate
Issue price
2-b. The bonds will issue at
O A Discount
OA Premium
O Face amount
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