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Babcock Co. issued 20-year, $1,000,000 bonds that pay semiannual anual interest of $40,000. If the effective annual rate of interest is 10%, what is the
Babcock Co. issued 20-year, $1,000,000 bonds that pay semiannual anual interest of $40,000. If the effective annual rate of interest is 10%, what is the issue price of the bonds? Some relevant and irrelevant present value factors:
- PV of ordinary annuity of $1:n=20;i=10% is 8.51350 *PV of $1:n=20;i=10% is 0.14864 + PV of ordinary annuity of $1:n=40;i=5% is 17.15909 *PV of $1:n=40;i=5% is 0.14205 $828,414 $1,000,000. $893,000. $1,686,000
Babcock Co. issued 20-year, $1,000,000 bonds that pay semiannual anual interest of $40,000. If the effective annual rate of interest is 10%, what is the issue price of the bonds? Some relevant and irrelevant present value factors:
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