Dumbledore has decided to issue a 10-year, $ bond with interest paid semiannually. The market rate (yield) for bonds of similar risk and maturity is %. Dumbledore is considering a stated (coupon) rate of %, %, or %. |
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1. Complete the Bond Amortization Schedules for each of the three potential stated rates. Also indicate whether the bond would be issued at a premium, discount or face amount. | | | |
Excel Project #3 Hogwarts School of Witchcraft and Wizardry is building an addition to its castle, funded through a bond issuance. Specific information about the bond is provided below. Albus Dumbledore, the school's headmaster, would like some assistance in relation to bond issuance and asks that you provide the following: (1) An amortization schedule for the three different pontential stated rates of the bond (2) Two graphs to help him understand how the different stated rates would affect the school's financial statements (a line graph of the bond's carrying value and a bar graph of the interest expense) (3) Your recommendation of which stated rate they should use when issuing the bonds and WHY. Any additional insights you have would be greatly appreciated. D F M N D T U Dumbledore has decided to issue a 10-year. $ bond with interest paidzemiannually. The market rate (yield) for bonds of similar risk ard maturity is Dumbledore iscursidering state loupon rate of % %, ur 1. Complete the Blond Amortation Schedule for math of the three patential statedrats. Ads indicate whether the band would be murd'ata premium desunt or face amount , 7 & Bond Amortation Schedule with stated Rate of 9 Band Amorkation Schedule with Stated Rate of % Payment Payment Balance (Carrying Value Bond Amortation Schedule with Started Rate of % Balance Och interest Interest Amortiwin Payment Carrying Value Eupes Deshire Payment Payment Interest Expre 10 Balance Carrying Valu Och interest Payment Amerilor Interest Eupen Amartwin 11 Beg Balance Ben Blu 12 1 Bug Bus 1 2 2 1 2 2 3 3 3 12 14 15 16 17 4 0 5 5 5 6 5 6 7 6 7 7 18 19 8 B B 20 9 9 9 9 10 10 10 22 11 11 11 22 12 12 12 24 13 13 13 25 14 10 10 15 15 15 27 16 16 16 13 17 17 18 18 19 30 18 19 201 19 1 20 201 32 32 This bond would be sued at This bond would be sueda: TNs bond would be issued at 34 Excel Project #3 Hogwarts School of Witchcraft and Wizardry is building an addition to its castle, funded through a bond issuance. Specific information about the bond is provided below. Albus Dumbledore, the school's headmaster, would like some assistance in relation to bond issuance and asks that you provide the following: (1) An amortization schedule for the three different pontential stated rates of the bond (2) Two graphs to help him understand how the different stated rates would affect the school's financial statements (a line graph of the bond's carrying value and a bar graph of the interest expense) (3) Your recommendation of which stated rate they should use when issuing the bonds and WHY. Any additional insights you have would be greatly appreciated. D F M N D T U Dumbledore has decided to issue a 10-year. $ bond with interest paidzemiannually. The market rate (yield) for bonds of similar risk ard maturity is Dumbledore iscursidering state loupon rate of % %, ur 1. Complete the Blond Amortation Schedule for math of the three patential statedrats. Ads indicate whether the band would be murd'ata premium desunt or face amount , 7 & Bond Amortation Schedule with stated Rate of 9 Band Amorkation Schedule with Stated Rate of % Payment Payment Balance (Carrying Value Bond Amortation Schedule with Started Rate of % Balance Och interest Interest Amortiwin Payment Carrying Value Eupes Deshire Payment Payment Interest Expre 10 Balance Carrying Valu Och interest Payment Amerilor Interest Eupen Amartwin 11 Beg Balance Ben Blu 12 1 Bug Bus 1 2 2 1 2 2 3 3 3 12 14 15 16 17 4 0 5 5 5 6 5 6 7 6 7 7 18 19 8 B B 20 9 9 9 9 10 10 10 22 11 11 11 22 12 12 12 24 13 13 13 25 14 10 10 15 15 15 27 16 16 16 13 17 17 18 18 19 30 18 19 201 19 1 20 201 32 32 This bond would be sued at This bond would be sueda: TNs bond would be issued at 34