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***just need B answered** Cassin Corporation sold $2.5 million worth of 20-year, 6.5% bonds on July 1, 20x3. The bonds will pay interest every December
***just need B answered**
Cassin Corporation sold $2.5 million worth of 20-year, 6.5% bonds on July 1, 20x3. The bonds will pay interest every December 31 and June 30. | |||||
Required: | |||||
a. | What will be Cassin's total interest expense over the life of the bonds if the bonds are sold at 96? | ||||
Amount repaid | |||||
Cash paid for interst (2500000*6.25%*20) | |||||
Maturity Value | |||||
Total repaid | |||||
Less: Issue prpice (2500000*.96) | |||||
Total interest expense | |||||
b. | What will be Cassin's total interest expense over the life of the bonds if the bonds are sold at 96? | ||||
Total interest expense will be $3,350,000 |
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