A 10-year, 12.00%, $5,000 bond that pays dividends quarterly can be purchased for $4,456. This means that $4,456 is spent on the bond now. Every quarter, $150.00 is provided to the purchaser as the dividend. After 10 years, $5,000 is given to the purchaser. If the bond is purchased and pays as scheduled, which of the following ranges of effective rate of return will the purchaser receive? 12.00% 12.50%

A 10-year, 12.00%, $5,000 bond that pays dividends quarterly can be purchased for $4,456. This means that $4,456 is spent on the bond now. Every quarter, $150.00 is provided to the purchaser as the dividend. After 10 years, $5,000 is given to the purchaser. If the bond is purchased and pays as scheduled, which of the following ranges of effective rate of return will the purchaser receive? 12.00% 12.50%

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 13Q: A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market...

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