Question
ABC Manufacturing issues a $100,000 face value bond at a discount of $92,788, 5-year maturity, 10% interest paid annually, the yield rate of interest is
ABC Manufacturing issues a $100,000 face value bond at a discount of $92,788, 5-year maturity, 10% interest paid annually, the yield rate of interest is 10%. Should ABC Manufacturing accept the $92,788 for that $100,000 bond? do you agree? If you do not agree, explain the reasons why you think they would not accept this bond. In business there are many factors to consider besides if I take action A then I will make this much money. What would those factors be? Some of these are not necessarily covered in the text book, but they are part of reality and we have to consider this; it's called life.
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