Question
LaTanya Corporation is planning to issue bonds with a face value of $102,500 and a coupon rate of 6 percent. The bonds mature in seven
LaTanya Corporation is planning to issue bonds with a face value of $102,500 and a coupon rate of 6 percent. The bonds mature in seven years. Interest is paid annually on December 31. All of the bonds will be sold on January 1 of this year. (EV of $1, PV of $1, EVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required: Compute the issue (sales) price on January 1 of this year for each of the following independent cases: a. Case A: Market interest rate (annual): 6 percent. Issue price $ 102,504 b. Case B: Market interest rate (annual): 4 percent. Issue price $ 114,803 c. Case C: Market interest rate (annual): 7 percent. Issus price $ 96,981
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