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You have been hired to analyze the debt securities of your organization. The firm has outstanding loans and bonds. A quick review of the balance
You have been hired to analyze the debt securities of your organization. The firm has outstanding loans and bonds. A quick review of the balance sheet shows the following: Nominal Interest (coupon) Rate Liability Amount (S) Years to Ma Selected Liabilities of the firm Simple Loans Fixed-Payment Loans Long-term Bonds #1 Long-term Bonds #2 Liabilities Total Market Price for Bond #1 Market Price for Bond #2 Face Value of Each Bond 800 5,000 500,000 1,080,000 1,585,800 930.50 859.50 5% 1296 1096 1096 4 10 1,000.00 Selected Current Assets of the firm Marketable Securities Treasury Bills 100,000 Note: Treasury Bills have a S 10,000 face value, which matures in one year. Each Treasury Bill has a cost of $ 9,580.00
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