Calculate the bond selling price for the three separate scenarios that follow. a. 33M Corp. authorized and issued $260,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 8%. b. 33M Corp. authorized and issued $650,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 6%. c. 33M Corp. issued $195,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate of interest on similar bonds is 6%.
Calculate the bond selling price for the three separate scenarios that follow. a. 33M Corp. authorized and issued $260,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 8%. b. 33M Corp. authorized and issued $650,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 6%. c. 33M Corp. issued $195,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate of interest on similar bonds is 6%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Determining Bond Selling Price
Calculate the bond selling price for the three separate scenarios that follow.
a. 33M Corp. authorized and issued $260,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds
pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 8%.
b. 33M Corp. authorized and issued $650,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds
pay cash interest semiannually on july 1 and January 1, and the market rate of interest on similar bonds is 6%.
c. 33M Corp. issued $195,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate
the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate of interest on
similar bonds is 6%.
Note: Round answers to the nearest whole dollar.
S 208,539 ✓
698,352 v
180,648 x
b. 5
5
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