Answered step by step
Verified Expert Solution
Question
1 Approved Answer
5. A bond with a face value of $50,000 was issued for $46.750 on January 1, 2014. The Coupon rate of interest was 8% a
5. A bond with a face value of $50,000 was issued for $46.750 on January 1, 2014. The Coupon rate of interest was 8% a year and the market rate of interest was 10% when the bond was issued. There was no issue cost for the bond. Cash interest is paid annually. How much interest will be paid in cash on December 31, 20147 a. $4,000 b. $5,000 c. $3.740 d. $4,675 6. LF Corporation issued $400,000 (Face value) of 15 year bonds on January 1 with a stated interest rate per year of 8%. The bond pays cash interest biannually on June 30 and December 31. If the market interest rate is 6% at the time bonds are issued, what will be the issue price of bonds? Assume there is no issue cost incurred for these bonds. Choose the nearest amont. a. $478,406 b. $399.992 c. $400,000 d. $632,205
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started