Hopkins

Company is planning to issue $480,000

of 10%,

15-year

bonds payable to borrow for a major expansion. The owner, Barry

Hopkins,

asks your advice on some related matters.

Read the requirementsLOADING...

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Part 1

Requirement 1. Answer the following questions.

a. At what type of bond price will Hopkins Company have total interest expense equal to the cash interest payments?

Hopkins Company is planting to issoe $480,000 of 10%. 15-year bonds payable to honrou for a majar expanske. The owner, Barry Hopkins, aska yout adrice an some re-4ted matters Fead the reqiemenens. Requirement 1. Anwwer the following questions At what type of bond price will Hopkins Company have totai inerest exense equal to the cosh a. interest payments? Requirements 1. Aniver the haobing quesbins a. At what vpe of bond pice nat Hoplios Compent hern tolal watest eapeitse equal to the cash intenest payments? t. Under which type of bond prico wil Hogains Conparigs todal interest axpense be geater then the cash inteotest payments? c. If the market interest rain is 13\%, what type of bond pice can Hopbins Company expect far the bonds? 2. Cenpuat the price of the bonds if the bonds are bsued at so 3. How much will Hoplins Company pay in intereit aach year? How mich wall Hophine Corepany's. Inforest expense be for the fleat year? (Assume the etralgte the method is iesed)