Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

LaTanya Corporation is planning to issue bonds with a face value of $108,500 and a coupon rate of 6 percent. The bonds mature in seven

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
LaTanya Corporation is planning to issue bonds with a face value of $108,500 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. (FV of S1. PV of S1. FVA of \$1. and PVA of \$1) Note: Use appropriate factor(s) from the tables provided. Required: Compute the issue (sales) price on January 1 of this year for each of the following independent cases: a. Cose A Market interest fate (annual) 6 percent b. Cose B: Market interest rate (annual): 4 percent. c. Cose C. Market interest rate (annual): 7 percent. Complete this question by entering your answers in the tabs below. Compute the issue (sales) price on January 1 of this year for the following independent case: Case A : Market interest rate (annual): 6 percent, (Round your intermedlate calculations and final answer to whole doliars.) LaTanya Corporation is planning to issue bonds with a face value of $108,500 and a coupon rate of 6 percent. The bonds mature in seven years. Interest is pald annually on December 31 . All of the bonds will be sold on January 1 of this year. (FV of $1. PV of $1. EVA of \$1, and PVA of \$1) Note: Use oppropriate factor(s) from the tables provided. Required: Compute the issue (sales) price on January 1 of this year for each of the following independent cases: a. Cose A. Market interest rate (annual): 6 percent. b. Cose B. Market interest rate (annual): 4 percent. c Cose C Market interest rate (annuai): 7 percent. Complete this question by entering your answers in the tabs below. Compute the issue (sales) price on January 1 of this year for the following independent case: Case B: Market interest rate (annual): 4 percent. (Round your intermediate calculations and final answer to whole doliars.) LaTanya Corporation is planning to issue bonds with a face value of $108,500 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 thils year. (FV of S1, PV of $1. FVA of \$1. and PVA of \$1) Note: Use appropriate foctor(s) from the tables provided. Required: Compute the issue (sales) price on January 1 of this year for each of the following independent cases: a. Cose A. Market interest rate (annual): 6 percent. b. Cose B Market interest rate (annual): 4 percent. c Cose C Market interest rate (annual): 7 percent. Complete this question by entering your answers in the tabs below. Compute the issue (sales) price on January 1 of this year for the following independent case: Case C: Marknt interest rate (annual): 7 percent. (Round your intermediate calculations and firial answor to whole dollars.) Future Valse of \$1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline Periads & 1.0s & 2.05 & 2.05 & & 4.os & 4.255 & 5.0s & 3.0s & 1.0% \\ \hline 1 & 1.01000 & 1.02000 & 103000 & 103750 & 104500 & 104750 & 105000 & 106000 & 1.07000 \\ \hline 2 & 1.02010 & 1.04060 & 1.06090 & toreat & coares & 1.08691 & 1.10050 & 1.12350 & 1.14490 \\ \hline 3 & 1.03030 & 1.06121 & 1.08273 & 1116 & 112436 & 113300 & 1.15763 & 1,19102 & 1.22504 \\ \hline 4 & 1.04060 & 100203 & 1.12855: & t.sast & & 1.88115 & 1.21551 & 1.26248 & 131080 \\ \hline 5 & 1.05101 & 1.10408 & 1.15927 & 1.20210 & 121645 & 123135 & 1.27628 & 133823 & 1.40255 \\ \hline 6 & 1.05152 & 1,12616 & 1.19405 & 1.297ts & 16512 & 1.28064 & 1.34010 & 1.41352 & 150073 \\ \hline , & 107214 & 1.14069 & 122857 & 129395 & 2.31593 & 133e24 & 1.40710 & 150363 & 1.60578 \\ \hline 8 & 108286 & 1.1766 & 1265n & 134207 & 134457 & 139511 & 1.47745 & 159385 & \\ \hline 9 & 1.00369 & 1.19500 & 1.3047 & 139231 & 1.42331 & 1.45440 & 1.55133 & 166948 & 1.83846 \\ \hline 10 & 1.10462 & 1.21899 & 130992 & 1.44304 & 1 anoge & 151621 & 1.62889 & troos & 1.96715 \\ \hline \end{tabular} Future Valse of \$1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline Periods & 1.08 & 2.0s & 3.0s & 2.735 & 4m & 6.25s & 5.0s & 5.0s & 7.0% \\ \hline 11 & 211567 & 124397 & 138423 & & trages & 159065 & 1.71034 & 1.89830 & 2.10485 \\ \hline 12 & 1.12683 & 1.26824 & & 155565 & 1.tonos & & 179sas & 201220 & 2.25219 \\ \hline 13 & 1.11000 & 1.29361 & 1. 4bas3 & 1.6137 & tessor & 1717as & 1 asses & 213293 & 2.409 s \\ \hline 14 & 1.14947 & 1.31948 & 151255 & 167430 & 68 & 1.79097 & 1.97993 & 226090 & 2.57853 \\ \hline 15 & 1.16097 & 1.34587 & 1.55797 & inses & 1030654 & 1.ste9 & 207693 & 239656 & 2.75903 \\ \hline 16 & & 1.3mm & 16047 & 1.90m & 1mma & 19063 & 2.10287 & 254035 & 295216 \\ \hline 17 & 1. 18630 & 1.40024 & 1652es & 1.06se1 & 19470 & 202005 & 229202 & 269277 & 3.15832 \\ \hline 18 & 1.19615 & 1.42825 & 1.70243 & 1.935s & 202502 & 211523 & 240662 & 2.85434 & 33993 \\ \hline 19 & 1.20811 & 1.45681 & 1.75351 & 201268 & 2.0645 & 2.20519 & 252695 & 302560 & 361653 \\ \hline 20 & 122015 & 1.465\%5 & 180611 & 204815 & 219112 & 2 xest & 2.65330 & 320714 & 1.16568 \\ \hline 25 & 128703 & 1.64061 & 20037 & 251017 & 2 ceses & 230075 & 338635 & 4.9187 & 5.42743 \\ \hline 30 & 1.34765 & 1.81136 & 242725 & 30174 & & 3.40564 & 4.32194 & 5.74349 & 2.61226 \\ \hline \end{tabular} Future Value of \$1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline Periade & a.os & 9.06 & 10.05 & 11.08 & 12.05 & 13.0x & ti.os & 15.0s & 20.0s & 25.0N \\ \hline 1 & 1.00000 & 1.00000 & 1.10000 & 1,11000 & 112000 & 1,13000 & 1.14000 & 1.15000 & 1.20000 & 1.25000 \\ \hline 2 & 1.16540 & 1,12810 & 1.21000 & 1.22210 & 125400 & & 1.29%60 & 1.32250 & 2.44000 & 1.56250 \\ \hline 3 & 1.25971 & 1.29503 & 13100 & 1.36763 & tas433 & tanso & t.at154 & 1.52003 & ln300 & 1.9531 \\ \hline 4 & 1.36049 & 1.41158 & 1.46410 & 1.51007 & 15ns? & 160047 & & 1.74901 & 2.07360 & 244141 \\ \hline 5 & 1.46933 & 1.53062 & 1.61051 & 168506 & & & & 201136 & 24sin2 & 305176 \\ \hline 6 & 1.5ass7 & 1.6m10 & 1 miss & & 19na? & 200155 & 2. 19497 & 231306 & 294588 & 3.81470 \\ \hline , & 171382 & 182004 & 1.94kn & 200616 & 221068 & 235261 & 2sem & 2.66002 & 358318 & 4.7639 \\ \hline 8 & 1.85093 & 199756 & 214359 & 230454 & 247 ses & 2 ssaet & 2 asaso & 305902 & 4.79sa? & 5.96045 \\ \hline 9 & 1.99000 & 217189 & 2357% & 2.55804 & 2nsoe & 3.00034 & 325195 & 251768 & 5.15978 & 7,45058 \\ \hline 10 & 215392 & 2.35736 & 259374 & 283542 & 3 iosas & 339457 & 30m & 404556 & 6.19174 & 931323 \\ \hline \end{tabular} Future Vabse of $1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline Perieda & s.es & 2.05 & 10.0s & 11.08 & 12.0s & 12.0s & 1408 & 15.0N & 20.0s & 25.0s \\ \hline 11 & 2.33164 & 2.58043 & 285312 & 315176 & 3 evess & 323586 & 42spz & 4.65239 & 7,43008 & 11.64153 \\ \hline 12 & 251817 & 281265 & 3 13ex & 3.49045 & ansse & 4.33452 & 481790 & 5.35025 & 891610 & 1455192 \\ \hline 13 & 271962 & 306580 & 3.452m & 3k8m2s & 43830 & A aseot & 5.45241 & 6.15279 & 10.69932 & 18. 18989 \\ \hline 14 & 2.93719 & 3.34173 & 379750 & 431044 & & 553473 & 6.25135 & 7.07571 & 1283918 & 22.73737 \\ \hline 15 & 3.17217 & 2.64248 & 4.17ms & 478459 & 541357 & 6.25427 & 7.137se & 8.13705 & 15.40702 & 28.42171 \\ \hline 16 & 342594 & 397031 & 459es? & 531089 & 613019 & 206733 & e13ns & 9.35762 & 18.48543 & 3552714 \\ \hline 17 & 3.70002 & 4.32763 & 5.05407 & 5.89509 & 506604 & 7.50608 & 9.27646 & 10.76126 & 2218611 & 44.40892 \\ \hline 18 & 3.99602 & 4.71712 & 5.55992 & 5s435s & 2.sass? & 208027 & 10.57517 & 12.37545 & 2562333 & 55.51115 \\ \hline 19 & 4.31570 & 5.14166 & 6.11591 & 7.26334 & 861276 & 10. 19742 & 1205569 & 14.23177 & 31.94800 & 6938394 \\ \hline 20 & 4.66096 & 560441 & 672750 & 806231 & s.6ens & 11.52309 & 127049 & 16.36654 & 38.33760 & 86.73617 \\ \hline 25 & 6.84848 & 8.62308 & 108367 & 1358545 & 1700006 & 21.23054 & 25.46192 & 32.91895 & 95.39622 & 26469780 \\ \hline 30 & 1006266 & 13.26768 & 17.44940 & 2289230 & 2995992 & 3911590 & 5095016 & 66.21177 & 237.37631 & 807.79357 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{11}{|c|}{ Present Value of $1} \\ \hline Periods & 1.0N & 2.0s & 3.0% & \multicolumn{2}{|l|}{3.75%} & 6.0% & 4.25% & 5.0% & 6.0s & 7.0s \\ \hline 1 & 0.99010 & 0.99039 & 0.97087 & \multicolumn{2}{|l|}{0.96385} & 0.96154 & 0.95923 & 0.95238 & 094340 & 0.93458 \\ \hline 2 & 0.98030 & 0.96117 & 0.94260 & \multicolumn{2}{|l|}{0.92902} & 0.92456 & 0.92013 & 0.90703 & 0.89000 & 0.87344 \\ \hline 3 & 097059 & 0.94232 & 091514 & \multicolumn{2}{|l|}{0.89544} & 0.88900 & 0.88262 & 0.86384 & 0.83962 & 0.81630 \\ \hline 4 & 0.96098 & 0.92385 & 0.88849 & \multicolumn{2}{|l|}{0.85307} & 0.85480 & 0.84663 & 0.82270 & 0.79209 & 0.76290 \\ \hline 5 & 0.95147 & 0,90573 & 0.86251 & \multicolumn{2}{|l|}{0.83+88} & 0.82193 & 0.81212 & 0.78353 & 0.74726 & 0.71299 \\ \hline 6 & 0.94205 & 0.88797 & 0.83748 & 0.80181 & & Q.79031 & 0.77901 & 0.74622 & 0.70496 & 0.06634 \\ \hline 7 & 0.93272 & 0.87056 & 0.81309 & 0.77283 & & 0.75992 & 0.74725 & 0.71068 & 0.66506 & 0.62275 \\ \hline 8 & 0.92343 & 0.85349 & 0.78941 & 0.74490 & & 0.73059 & 0.71679 & 0.67684 & 0.62741 & 0.58201 \\ \hline 9 & 0.91434 & 0.83676 & 0.76642 & 0.71797 & & 0.70259 & 0.68757 & 0.64461 & 0.59190 & 0.54393 \\ \hline 10 & 090529 & 0.82035 & 0.74409 & 0.69202 & & 0.67556 & 0.65954 & 0.61391 & 0.55839 & 0.50835 \\ \hline Present & tue of $1 & & & & & & & & & \\ \hline Periods & 1.0w & 2.0N & 3.0% & 3.25% & & 6.0% & 4.258 & 5.0% & 6.0s & 7.0% \\ \hline 11 & 0.89632 & 0.80426 & 0.72242 & 0.66701 & & 0.64958 & 0.63265 & 0.58463 & 0.52679 & 0.47509 \\ \hline 12 & 0.88745 & 0.78849 & 0.70138 & 0.64290 & & 0.52460 & 0.60685 & 0.55684 & 0.49697 & 0.44401 \\ \hline 13 & Q.76 6 & 0.77303 & 0.68095 & 0.61966 & & 0.60057 & 0.53212 & 0.53032 & 0.46834 & 0.41496 \\ \hline 14 & 0.86996 & 0.75788 & 0.65112 & 0.59726 & & 0.57748 & 0.55839 & 0.50507 & 0.44230 & 0.38782 \\ \hline 15 & 0.86135 & 0.74301 & 0.64186 & 0.57568 & & 0.55526 & 0.53562 & 0.48102 & 0.41727 & 036245 \\ \hline 16 & 0.85282 & 0.72845 & 0.62317 & 0.55487 & & 0.53391 & 0.51379 & 0.45811 & 0.39365 & 0.33873 \\ \hline 17 & 0.84438 & 0.71416 & 0.60502 & 0.53481 & & 0.51337 & 0.49284 & 0.43630 & 0.37136 & 0.31657 \\ \hline 18 & 0.83602 & 0.70016 & 0.58739 & 0.51548 & & 0.49953 & 0.47275 & 0.41552 & 0.35034 & 0.29586 \\ \hline 19 & 0.82774 & 0.68643 & 0.57029 & 0.49685 & & 0.47464 & 0.45348 & 0.39573 & 0.33051 & 0.27551 \\ \hline 20 & 0.81954 & 0.67297 & 0.55368 & 0.47389 & & 0.45639 & 0.43499 & 0.37689 & 0.31180 & 0.25842 \\ \hline 25 & 0.7nn & 0.60053 & 0.47761 & 0.39838 & & 0.37512 & 0.35326 & 0.20530 & 0.23300 & 0.18425 \\ \hline 30 & 0.74192 & 0.55207 & 0.41199 & 0.33140 & & 0.30032 & 0.28689 & 0.23138 & 0.17411 & 0.13137 \\ \hline Present & lue of \$1 & & & & & & & & & \\ \hline Perieds & a.os & 9.0K & 10.0% & 11.0s & 12.06 & 13.0% & 14.015 & 15.04 & 20.014 & 25.0s \\ \hline 1 & 0.92593 & 0.91743 & 0.90909 & 0.90090 & 0.89286 & 0.88496 & 0.87719 & 0.86957 & 0.83333 & 0.80000 \\ \hline 2 & 0.85734 & 0.84168 & 0.82645 & 0.81162 & 0.79719 & 0.78315 & 0.76947 & 0.75614 & 0.69444 & 0.64000 \\ \hline 3 & 0.79383 & 0.77218 & 0.75131 & 0.73119 & 0.71178 & 0.69305 & 0.67497 & 0.65752 & 0.57870 & 0.51200 \\ \hline 4 & 0.73503 & 0.70543 & 0.68301 & 0.65873 & 0.63552 & 0.51332 & 0.59208 & 0.57175 & 0.48225 & 0.40960 \\ \hline 5 & 0.68058 & 0.64993 & 0.62092 & 0.59345 & 0.56743 & 0.54276 & 0.51937 & 0.49718 & 0.40188 & 0.32768 \\ \hline 6 & 0.63017 & 0.59627 & 0.56447 & 0.53464 & 0.50663 & 0.48032 & 0.45559 & 0.43233 & 0.33490 & 0.26214 \\ \hline 7 & 0.58349 & 0,54703 & 0.51316 & 0.48166 & 0.45235 & 0.42506 & 0.39954 & 0.37594 & 0.27908 & 0.20972 \\ \hline 8 & 0.54027 & 0.50187 & 0.46651 & 0.43393 & 0.40385 & 0.37616 & 0.35056 & 0.32690 & 0.23257 & 0.1677 \\ \hline 9 & 0.50025 & 0.46043 & 0.42410 & 0.39092 & 0.36061 & 0.33288 & 0.30751 & 0.28426 & 0.19381 & 0.13422 \\ \hline 10 & 0.46319 & 0.42241 & 0.38554 & 0.35218 & 0.32197 & 0.29459 & 0.26974 & 0.24718 & 0.16151 & 0.1073 \\ \hline Present & ve of $1 & & & & & & & & & \\ \hline Periods & 8.0% & 9.0% & 10.0N & 11.0 & 12.0s & 13.05 & 14.05 & 15.0s & 20.015 & 28.015 \\ \hline 11 & 0.42888 & 0.38753 & 0.35049 & 0.31728 & 0.28748 & 0.26070 & 0.23662 & 0.21494 & 0.13459 & 000590 \\ \hline 12 & 0.39711 & 0.35553 & 0.31863 & 0.23584 & 0.25668 & 0.23071 & 0.20756 & 0.18691 & 0.11216 & 0.06872 \\ \hline 13 & 0.36770 & 0.32618 & 0.28966 & 0.25751 & 0.22917 & 0.20416 & 0.18207 & 0.16253 & 0.09346 & 0.05498 \\ \hline 14 & 0.34046 & 0.29925 & 0.26333 & 0.23199 & 0.20462 & 0.18068 & 0.15971 & 0.14133 & 007789 & 004398 \\ \hline 15 & 0.31524 & 0.27454 & 0.23939 & 0.20900 & 0.18270 & 0.15989 & 0.14010 & 0.12289 & 0.06491 & 0.03518 \\ \hline 16 & 0.29189 & 0.25187 & 0.21763 & 0.18829 & 0.16312 & 0.14150 & 0.12289 & 0.10685 & 0.05409 & 0.02815 \\ \hline 17 & 0.27027 & 0.23107 & 0.19784 & 0.16963 & 0.14564 & 0.12522 & 0.10780 & 0.09293 & 004507 & 0.02252 \\ \hline 18 & 0.25025 & 0.21199 & 0.17966 & 0.15282 & 0.13004 & 0.11081 & 0.09456 & 0.08081 & 0.03756 & 001801 \\ \hline 19 & 0.23171 & 0.19449 & 0.16351 & 0,13768 & 0.11611 & 0.09806 & 0.08295 & 0.07027 & 0.03130 & 0.01441 \\ \hline 20 & 0.21455 & 0.17843 & 0.14864 & 0.12403 & 0.10367 & 0.08678 & 0.07276 & 0.06110 & 0.02608 & 0.01153 \\ \hline 25 & 0.14602 & 0.11597 & 0.09230 & 0.07361 & 0.05882 & 0.04710 & 0.03779 & 0.03038 & 0.01048 & 0.00378 \\ \hline 30 & 0.09938 & 0.07537 & 0.05731 & 0.04368 & 0.03338 & 0.02557 & 0.01963 & 0.01510 & 0.00421 & 0.00124 \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Accounting An Introduction To Financial And Management Accounting

Authors: Jill Collis, Roger Hussey, Andrew Holt, Holt Collis, J. Collis

2nd Edition

0230276237, 978-0230276239

More Books

Students also viewed these Accounting questions

Question

What other blunt questions do you think would be appropriate?

Answered: 1 week ago