Kelpax Company issued seven-year, $100,000 bonds with a stated rate of interest of 8%, compounded semiannually. The
Question:
Kelpax Company issued seven-year, $100,000 bonds with a stated rate of interest of 8%, compounded semiannually. The effective interest rate demanded by investors for bonds of this level of risk is 6%. Calculate the issuance price of the bond (e.g., the total present value).
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 54% (11 reviews)
Semiannual interest payments 4000 Present value of an annuity of 14 pay...View the full answer
Answered By
Dorcas Juliet
I am a proficient tutor and writer with over 4 years experience, I can deliver A+ works in all fields related to business and economics subject. Kindly hire me for excellent papers
4.70+
10+ Reviews
51+ Question Solved
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Question Posted:
Students also viewed these Accounting questions
-
A bond carries a stated rate of interest of 6% and par of $1,000. It matures in 20 years. It is sold at 83 (83% of $1,000, or $830). a. Under normal conditions, why would the bond sell at less than...
-
Idaho Company issued 15-year, $100,000 bonds with a stated rate of interest of 8%, compounded quarterly. The effective interest rate demanded by investors for bonds of this level of risk is also 8%....
-
The current market rate of interest is 8 percent. At that rate of interest, businesses borrow $500 billion per year for investment and consumers borrow $100 billion per year to finance purchases. The...
-
Measured along the surface of the water, a rectangular swimming pool has a length of 15 m. along this length, the flat bottom of the pool slopes downward at an angle of 11 below the horizontal, from...
-
Which of the folllowing statements is true? A. A nation will generally be able to consume less when it trades because of lost jobs to outsourcing B. The consumption possibilities curve generally...
-
Exercise is useful not only in preventing depression, but also as a treatment. The following graphs show the percentage of patients with depression in remission when exercise (brisk walking) was used...
-
When implementing OD interventions, how should managers deal with people who have low self-efficacy?p. 477
-
Geek Chic Company provides computer repair services for the community. Obie Wons computer was not working, and he called Geek Chic for a home repair visit. Geek Chic Companys technician arrived at 2:...
-
Discuss how big data and data analytics are changing the role of Management Accountants.
-
In a certain developing country, ecotourism income has been increasing in recent years. The income y (in thousands of dollars) x years after 2000 can be modeled by y = 1.15x + 14. (a) Draw the graph...
-
Forkman Company issued five-year, $25,000 bonds with a stated rate of interest of 8%, compounded semiannually. The effective interest rate demanded by investors for bonds of this level of risk is...
-
Arisael Company issued 20-year, $750,000 bonds with a stated rate of interest of 9%, compounded semiannually. The effective interest rate demanded by investors for bonds of this level of risk is also...
-
Provide examples of individual athletes, teams, and sports (leagues) that have had to develop repositioning strategies.
-
Evaluation a. Evaluate the effectiveness of social media marketing campaign for instagram, facebook and pintrest ?based on your KPIs for example account reached, content reached, likes, shares,...
-
A study was performed at a university to analyze whether the preference for hamburgers or fried chicken is related to the gender of the student. This table lists the results of the study. At a =...
-
A 20-lb homogeneous box has tipped and is resting against a 40-lb homogeneous box as shown in figure attached. The coefficient of friction between box A and the floor is 0.7, and between box B and...
-
The Taylor series for natural logarithm (with base e) In(1+r) is In(1+2) -(-1)+1 for <1. (a) Write a user-defined function using loop that determines In(1+x) using the above Taylor series. Your...
-
Question 1: [up to 4 pts] Suppose that a = 1, a2 = 2, a3 = = 3, and an = an-3 for all n 4. If an integral with respect to y is used to find the area of R, what should the upper limit of integration...
-
Fundamentals of Flexible Budgets Joan Eastman, the manager of a medical testing laboratory, has been under pressure from the director of the large clinic, Dr. Elvira Coleman, to get more productivity...
-
According to a recent survey, 40% of millennials (those born in the 1980s or 1990s) view themselves more as spenders than savers. The survey also reveals that 75% of millennials view social...
-
Determine the impedance of the circuit which has a complex power S = 5031 26.57 VA given an applied phasor voltage 212.10 V.
-
The following cash flow transactions are said to be equivalent in terms of economic desirability at an interest rate of 12% compounded annually. Determine the unknown value A. 750 600 450 300 150 1...
-
Upon the birth of his first child, Dick Jones decided to establish a savings account to partly pay for his son's education. He plans to deposit $20 per month in the account, beginning when the boy is...
-
Mary Lavor plans to save money at her bank for use in December. She will deposit $30 a month, beginning on March 1and continuing through November 1. She will withdraw all the money on December 1. If...
-
Diplomatic Security Service provides Airport Transportation and Surveillance Service to Foreign Diplomats in Guyana. The company has two support departments - Information Systems and Equipment...
-
Q1: A disparity of bargaining power between the parties to a contract may result in unfair terms but a court is not likely to consider the contract unconscionable. Group of answer choices a. True b....
-
Life Tool Manufacturing has a system in place to recall products that prove to be dangerous at some time after manufacture and distribution. This represents which element of the due care theory?...
Study smarter with the SolutionInn App