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Issue Price Youngblood Inc. plans to issue $500, 000 face value bonds with a stated interest rate of 8%. They will mature in ten years.
Issue Price Youngblood Inc. plans to issue $500, 000 face value bonds with a stated interest rate of 8%. They will mature in ten years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is 8%, 6%, and 10%. Use the appropriate present value table: PV of $1 and PV of Annuity of $1 For each market interest rate, answer the following questions. Round calculations and answers to the nearest whole dollar. What is the amount due at maturity? How much cash interest will be paid every six months? At what price will the bond be issued? Face value of the bonds is the maturity amount of the bonds as indicated on the face of the bond contract. Face rate of interest is the amount of interest that will be paid on the bonds as indicated in the bond contract. n = periods, i = annual market rate of interest/periods per year. Bonds typically pay interest twice a year
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