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stuck please answer all of Use the following to answer questions 11 - 15 ALissues 4.0%, 20-year bonds with a face amount of $1,000,000 for
stuck please answer all of
Use the following to answer questions 11 - 15 ALissues 4.0%, 20-year bonds with a face amount of $1,000,000 for $986,529.23. The market interest rate for bonds of similar risk and maturity is 4.1%. Interest is paid annually. 11.5 Determine the interest payment. 12. S (rounded to nearest dollar). Determine interest expense for the first interest payment. 13. What will happen to interest expense each interest payment? (Increase, decrease, remain constant) 14. What will happen to the bond liability (carrying value) each interest payment? (Increase, decrease, remain constant). 15. S How much will the company pay out when the bonds mature in 20 years (assume all interest payments have already been 16. S _(rounded to nearest dollar) A ten year bond issue with a face amount of $100,000 bears interest at the rate of 5.0%. The current market rate of interest is 4.90%. Determine the issue price of this annual bond. 17. Bond X and Bond Y are both issued by the same company. Each of the bonds has a face value of $100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y pays 7% interest. The current market rate of interest is 7%. Which of the following is correct? a. Both bonds will sell for the same amount b. Bond X will sell for more than Bond Y C Bond Y will sell for more than Bond X d. Both bonds will sell at a premium. 18. Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return Market Rate of Return Bond 1 5% 7% Bond 2 7% 8% Bond 3 12% 12% Bond 4 10% 9% 19 % BD Company issues 6%, 10-year bonds with a face amount of $1,000,000 on January 1, 20A for $1,000,000. Interest is paid semiannually on June 30 and December 31. What was the market interest rate for the bond issuanceStep by Step Solution
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