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On May 1, 2020, Indigo Corporation, a publicly listed corporation, issued $ 173,300 of five-year, 8% bonds, with interest payable semi-annually on November 1 and
On May 1, 2020, Indigo Corporation, a publicly listed corporation, issued $ 173,300 of five-year, 8% bonds, with interest payable semi-annually on November 1 and May 1. The bonds were issued to yield a market interest rate of 6%. Indigo uses the effective interest method.
Calculate the present value (issue price) of the bonds on May 1 using (1) factor Tables A.2 and A.4, (2) a financial calculator, or (3) Excel function PV. (Hint: Refer to Chapter 3 for tips on calculating.)
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