Question
Problem: Straight Bonds, Semiannual ABC Corporation plans to issue pieces of 12%, 10-year, P1,000 face value bonds that pays semiannually. It will be sold at
Problem: Straight Bonds, Semiannual
ABC Corporation plans to issue pieces of 12%, 10-year, P1,000 face value bonds that pays semiannually. It will be sold at 104 but the underwriter will charge 2% on issue price. What is the cost of the bond based on the following methods?
A. Interpolation method using multiples of 1% (guess annual rates of whole percentage but halve this for semiannual rates). *
B. Yield-to-maturity formula *
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
