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a] Determine the market rate of the bonds. b] Determine the par (maturity) value of the bonds. c] Determine the coupon rate of the bonds.
a] Determine the market rate of the bonds.
b] Determine the par (maturity) value of the bonds.
c] Determine the coupon rate of the bonds.
d] Calculate the issue price of the bonds on January 1, 2015
You have been working as the controller of Fixzit Corporation for the past six years. Last week you had appointed a bright young student, Daye Bitt, from Konkord University as a work study intern for one year. Early this morning, the frazzled looking intern approaches you with a great bit of reluctance. From the looks on his face, you can determine fear, both for his current placement and for his future career. He informs you that, in his haste to complete an assigned task, he just shredded the active folder instead of the archived one. Next he shows you a very damaged piece of paper which Daye Bitt had rescued at a great risk to his hand and fingers. The document, in its original state, represented a bond amortization table, but now was totally shredded except for a few following lines of information: He sounded pretty desperate as he pleaded his hope that "... if I am unable to reproduce this table, I hope you are not going to can me tonight." He did not know the maturity value, stating "I am pretty young and will be called mature after a long time". About the coupon and market rates, he responded, "I really do not clip any coupons; my wife does. And since she does all the shopping, I have no idea about all the market prices". You are aware that the bonds were issued on January 1, 2015, maturing on December 31, 2024, and with interest payments on June 30 and December 31 . And so you sit down and show him how to reconstruct the table. In doing so, you need to answer the questions listed belowStep by Step Solution
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