Dickens Company is planning to issue $540,000 of 9%, 15-year bonds payable to borrow for a major expansion. The owner, Shane Dickens, asks your advice on some related matters.
Answer the following questions:
At what type of bond price will Dickens Company have total interest expense equal to the cash a. interest payments?
Under which type of bond price will Dickens Company's total interest expense be greater than the b. cash interest payments?
If the market interest rate is 12%, what type of bond price can Dickens Company expect for the bonds?
Compute the price of the bonds if the bonds are issued at 89.
The price of the $540,000 bond issued at 89 is ?
How much will Dickens Company pay in interest each year? How much will Dickens Company's interest expense be for the first year? (For this scenario we are assuming that the $540,000 bonds are issued at 89. Further assume that the straight-line method is used.)
If the $540,000 bonds are issued at 89, Dickens Company will pay this amount of interest each year (Round your answers to the nearest whole dollar.)
Dickens Company is planning to issue $540,000 of 9%, 15 -year bonds payabie to bortow for a major expansion. The owner, Shane Dickens, asks your advice on some related matters Read the requirements. Requirement 1. Answer the following questions Al what type of bond price wil Dickens Company have total interest expense equal to the cash a. interest payments? Under which type of bond pnce will Dickens Companys total interest expense be greater than the b. cash interest payments? If the market interest rate is 12%, what type of bond price can Dickens Company expect for the c. bonds? Requirement 2 . Compute the price of the bonds if the bonds are issued at 89 The pince of the $540,000 bond issued at 89 is Requirement 3. How much will Didens Company pay in interest each year? How much will Dickens Company's interest expense be for the first year? (For this scenario we are assuming that the $540,000 bonds are issued at 89 . Further assume that the straight-line method is used) If the $540,000 bonds are issued at 89, Didkens Company will pay this amount of interest each year (Round your answers to the nearest whole doliar) Assuming that the straight line method is used. Didkens Company's interest expence for the first year wit be Requirements 1. Answer the following questions: a. Ar what type of bond price wal Dickens Company have lotal interest expense equal to the cash interest payments? b. Under which fype of bond price wil bickens Compary/s total interest exponse be greater than the cash interest payments? c. If the market interest tate is 12%, what type of bond price can Dokens Comparyy eipect for the bonds? 2. Compule the price of the bonds it the bonds are issued at as 3. How moch wil Dichers Company pay in inlerest each year? How much wit Dichens Companys interest expense be for the finst year? (Assume the straight ine method is used) Dickens Company is planning to issue $540,000 of 9%, 15 -year bonds payabie to bortow for a major expansion. The owner, Shane Dickens, asks your advice on some related matters Read the requirements. Requirement 1. Answer the following questions Al what type of bond price wil Dickens Company have total interest expense equal to the cash a. interest payments? Under which type of bond pnce will Dickens Companys total interest expense be greater than the b. cash interest payments? If the market interest rate is 12%, what type of bond price can Dickens Company expect for the c. bonds? Requirement 2 . Compute the price of the bonds if the bonds are issued at 89 The pince of the $540,000 bond issued at 89 is Requirement 3. How much will Didens Company pay in interest each year? How much will Dickens Company's interest expense be for the first year? (For this scenario we are assuming that the $540,000 bonds are issued at 89 . Further assume that the straight-line method is used) If the $540,000 bonds are issued at 89, Didkens Company will pay this amount of interest each year (Round your answers to the nearest whole doliar) Assuming that the straight line method is used. Didkens Company's interest expence for the first year wit be Requirements 1. Answer the following questions: a. Ar what type of bond price wal Dickens Company have lotal interest expense equal to the cash interest payments? b. Under which fype of bond price wil bickens Compary/s total interest exponse be greater than the cash interest payments? c. If the market interest tate is 12%, what type of bond price can Dokens Comparyy eipect for the bonds? 2. Compule the price of the bonds it the bonds are issued at as 3. How moch wil Dichers Company pay in inlerest each year? How much wit Dichens Companys interest expense be for the finst year? (Assume the straight ine method is used)
