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A corporation issues $50 million of 7% bonds to yield interest at the rate of 9%. (A) Was the amount of cash received from the
A corporation issues $50 million of 7% bonds to yield interest at the rate of 9%. (A) Was the amount of cash received from the sale of the bonds greater or less than $50 million? (B) Identify the following amounts as they relate to the bond issue: (i) face amount. (ii) market or effective rate of interest. (iii) contract rate of interest. (iv) maturity amount.
A corporation issues $50 million of 7% bonds to yield interest at the rate of 9%.
(A) Was the amount of cash received from the sale of the bonds greater or less than $50 million?
(B) Identify the following amounts as they relate to the bond issue:
(i) face amount.
(ii) market or effective rate of interest.
(iii) contract rate of interest.
(iv) maturity amount.
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
5th Edition
0030113172, 978-0030113178
