Ecological Water Filtration, Inc., is going to issue ($ 400,000) face value of (10 %, 15)-year bonds.

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Ecological Water Filtration, Inc., is going to issue \(\$ 400,000\) face value of \(10 \%, 15\)-year bonds. The bonds are dated June 30, 1998, call for semiannual interest payments, and mature on June 30,2013

a. Compute the price investors should offer if they seek a yield of \(8 \%\) on these bonds. Also, compute the first six months" interest, assuming the bonds are issued at this price. Use the interest method and calculate all amounts to the nearest dollar.

b. Repeat part

a, assuming investors seek a yield of \(12 \%\).

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Financial Accounting A Business Perspective

ISBN: 9780072289985

7th Edition

Authors: Roger H. Hermanson, James Don Edwards

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