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Loyd Inc.will issue bonds to raise money for a new plant. Use the following data to compute the selling price of the bond. BOND FACE

Loyd Inc.will issue bonds to raise money for a new plant. Use the following data to compute the selling price of the bond.

BOND FACE VALUE $5,000,000

Stated Interest Rate 11%

Market Rate 8%

Bond Term (years) 15

Interest is paid semi-annually

HOW TO SOLVE THIS PROBLEM

1. Compute the present value of the principal.

2. Compute the present value fo the interet payments.

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