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Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for
Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 12 QS 10-3A Computing bond price C2 Confirm that the bonds' selling price is approximately correct (within $100). Use present value Table B.1 and Table B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations.) & Answer is complete but not entirely correct. Par Value x Price Selling Price 280,000 X Present IS 87 172 320,000 X S Cash Flow Table Value Value 0.3769 IS 120.608 $250.000 par (maturity) value $10.000 interest payment Price of Bond 12 4622 160 X S 280.124 8
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