Safe Toy Company is seeking to issue ($ 800,000) face value of (10 %, 20)-year bonds. The
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Safe Toy Company is seeking to issue \(\$ 800,000\) face value of \(10 \%, 20\)-year bonds. The bonds are dated June 30, 1998, call for semiannual interest payments, and mature on June 30, 2018.
\section*{Required}
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 that 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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Related Book For
Financial Accounting A Business Perspective
ISBN: 9780072289985
7th Edition
Authors: Roger H. Hermanson, James Don Edwards
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