Question
On January 1, 2020, Matador, Inc. issues a 5 year $100,000 face value bond with a 5% coupon rate. The interest is payable annually
On January 1, 2020, Matador, Inc. issues a 5 year $100,000 face value bond with a 5% coupon rate. The interest is payable annually each December 31. The market (effective) rate of interest is 8%. Assume the effective-interest amortization is used. How much are investors willing to pay for the bonds (i.e., what is the issuance price of bonds)? Use any of the following information, if needed, to answer: Present value factor for a 8%, 5-period single amount-0.6806 Present value factor for a 8%, 5-period annuity- 3.9927
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
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