Question
25. You issue $250,000 worth of 10 year, 9% bonds when the market rate was 6%, they are issued at $302,500. Interest is paid annually.
25. You issue $250,000 worth of 10 year, 9% bonds when the market rate was 6%, they are issued at $302,500. Interest is paid annually. Answer the following questions: (6 Points) A. Are the bonds issued at face value, a premium, or discount? Why? (4 Points) B. What is the interest expense in year 1? (4 Points)
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th Edition
1260772381, 978-1260772388
