1. ABC Company will issue $5,000,000 in 6%, 10-year bonds when the market rate of interest is...

Question:

1. ABC Company will issue $5,000,000 in 6%, 10-year bonds when the market rate of interest is 8%. Interest is paid semiannually.
Required:
Determine how much cash ABC Company will realize from the bond issue.
2. DEF Company will issue $2,000,000 in 10%, 10-year bonds when the market rate of interest is 12%. Interest is paid semiannually.
Required:
Determine how much cash DEF Company should realize from the bond issue.