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Doctor Strange Inc. issues …
a $100,000, 5-year, 8% bond.
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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?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. $15,000On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05
- 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?A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market rate of 7%. Interest is paid annually. What is the amount of interest the bondholders will receive at the end of the year?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, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.A company has issued a $20,000, 10 year bond. Each bond pays interest quarterly of 2%. Determine the amount a purchaser has to pay for the bond, if it yield a 12% compounded quarterly. a. PW = $32,000 b. PW = $31, 902 OC. PW = $15,378 d. PW = $28,000ABC Manufacturing issues a $100,000 face value bond at a discount of $92,788, 5-year maturity, 10% interest paid annually, the yield rate of interest is 10%.Explain why ABC Manufacturing would accept $92,788 for a $100,000 face value bond.
- Happy Hollow, LLC issues $50,000 bonds at 20% interest with quarterly interest payments. Bonds have a maturity date in 5 years. At the time of issue, the market rate is 16%. а. Calculate the issue price of the bond b. How much total interest does the bondholder receive over the life of the bond?A company issues GHS10 million of 6% bonds at a price of GHS100.50 for easch GHS100 nominal value with issue costs of GHS50,000. The bonds are redeemable after four years for GHS10,444,000.The effective annual interest for this financial instrument is 7%.Required:Calculate the amortised cost for the bond and show the interest income for each year to maturity.A 10-year, 6%, $5,000 bond (cash interest payable 3% semiannually) is sold to yield 8% interest. Compute the bond selling price.
