6. Tuck Co. plans on issuing three-year, 12% term bonds with face amount of P2,000,000. If the current rate on issuance date is 10%, the estimated issue price of the bonds would be a. 2,099,474. b. 2,123,649. c. 2,230,713. d. 1,979,365.
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- On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?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.2. DEF Company will issue $8,000,000 in 10%, 10-year bonds when the market rate of interest is 7%. Interest is paid semiannually. Required: a. Will this interest structure result in a Premium for DEF company or a Discount? b. How much cash will be received from the issuance of the bond? c. How much will the semi-annual interest payment be on the bond?
- ABC Corporation plans to issue a 9%, 10-year, P5,000,000 face value bonds. It will incur P500,000 as underwriting fee. What is the cost of the bond based on the following methods? 1. Yield to maturity formula 2.Trial and error method (closest percent, 3 decimal places)Karson Compahy. issues 10-year bonds maturity, face value of $200,000 and 8% interest rate. If the bonds are issued at 180,000 how much do you expect the market interest rate: Select one: Oa. % 6 O b. % 8 o C. % 4 Od %10Tuck Co. plans on issuing three-year, 12% term bonds with face amount of P2,000,000. If the current rate on issuance day is 10%, the estimated issue price of the bonds would be a. 2,099,474 b. 2,123,649 c. 2,230,713
- 13. Scaffolding Co. is contemplating on investing on 3-year, P1,000,000, 12% bonds to be classified as investment measured at amortized cost. Principal is due at maturity but interest is due semi-annually every July 1 and December 31. The current market rate on January 1, 20x1 is 14%. How much is the estimated purchase price of the bonds on January 1, 20x1? a. 960,964 b. 952,334 c. 949,812 d. 936,431 (dO Hint: Test-check your answer by preparing an amortization table. The amortized cost at maturity date should be equal to the face amount.)ABC will be issuing a non- interest-bearing bond that has a face value of P10,000,000, term of 5 years, and net proceeds of P6,375,000. 2. How much is the effective cost of the bonds?4b. The semiannual, 8-year bonds of Alto Music are selling at par and have an effectiveannual yield of 8.6285 percent. What is the amount of each interest payment if the face value ofthe bonds is $1,000?
- .14.. Fly Adventures issues bonds due in 10 years with a stated interest rate of 6% and a face value of $500,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. What is the issue price of the bonds? A. $537,194. B. $464,469. C. $538,973. D. $500,000. PV 1 2.5% 20pds .61027 PV 13% 10pds .74409 PVA 2.5% 20pds 15.56816 PVA 3% 20pds 14.87747Pearson Co issue its $193,400 at a price of 103, the stated rate is 9%, the bond term is 4 years, and the market rate is 6%. Assume the term of the bonds is 4 years. The annual interest payment on the bond will be $_______Mind Explorers issues bonds with a stated interest rate of 7%, face value of $220,000, and due in 10 years. Interest payments are made semi-annually. The market rate for this type of bond is 6%. Using present value tables, calculate the issue price of the bonds. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $236,367 $205,051 $220,000 $179,521 Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: ABC Co. Bonds Trading Securities: DEF Co. Bonds GEH Inc. Bonds IJK Inc. Bonds Available-for-Sale Securities: LMN Co. Bonds Fair Value Fair Value Amortized Cost 12/31/2020 12/31/2021 12/31/2020 $372,500 $380,000 $405,000 Multiple Choice Fair Value 12/31/2020 $ 53,000 $ 52,000 $ 49,000 Fair Value…
