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AAM Office Equip has issued $100,000,000 of bonds. They mature in 15 years and have a 7% coupon rate. When issued, the market rate for
AAM Office Equip has issued $100,000,000 of bonds. They mature in 15 years and have a 7% coupon rate. When issued, the market rate for similar bonds was 8.75%. Assume this caused the bonds to be sold for $91,000,000. AAM amortizes and premiums and discounts on a straight line method. The bond pays interest annually with principle due at maturity. Annual interest payments will be, assuming all payments on time the bond outstanding until maturity, will be
A $ 7, 000,000
B $ 7,600,000
C $ 6,400,000
D $ 9,000,000
E $ 8,750,000
11. AAM Office Equip has issued $100,000,000 of bonds. They mature in 15 years and have a 7% coupon rate. When issued, the market rate for similar bonds was 8.75%. Assume this caused the bonds to be sold for $91,000,000. AAM amortizes and premiums and discounts on a straight line method. The bond pays interest annually with principle due at maturity. Annual interest payments will be, assuming all payments on time the bond outstanding until maturity, will be A $ 7,000,000 o B $7,600,000 O C $6,400,000 O D $9,000,000 O E $8,750,000 [] FullscreenStep by Step Solution
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