Determinants of Interest Rate for Individual Securities You are considering an investment in 30-year bonds issued by a corporation. The bonds have no special covenants. The Wall Street Journal reports that 1-year T-bills are currently earning 3.60 percent. Your broker has determined the following information about economic activity and the corporation's bonds: Real interest rate = 2.80% Default risk premium = 2.35% Liquidity risk premium = 1.00% Maturity risk premium = 2.10% What is the inflation premium? What is the fair interest rate on the corporation's 30-year bonds?

Determining Selling Prices of Bonds Under Different Interest Assumptions Olay Inc. issues $50,000, 8%, 10-year bonds payable on January 1. Calculate the selling price of the bonds under the following separate assumptions. Round your answer to the nearest whole number. Do not use negative signs with your answers.   a. The bonds pay cash interest annually ($4,000) and the market rate of interest on similar bonds is 10%.     b. The bonds pay cash interest annually ($4,000) and the market rate of interest on similar bonds is 8%.     c. The bonds pay cash interest annually ($4,000) and the market rate of interest on similar bonds is 6%.     d. The bonds pay cash interest semiannually ($2,000) and the market rate of interest on similar bonds is 10%.     e. The bonds pay cash interest semiannually ($2,000) and the market rate of interest on similar bonds is 8%.     f. The bonds pay cash interest semiannually ($2,000) and the market rate of interest on similar bonds…

Bond (Held-to-Maturity)Investment Journalize the entries to record the following selected bond investment transactions for Marr Products: If an amount box does not require an entry, leave it blank. D.) Received face value of remaining bonds at their maturity. Cash- Investments- Hotline Inc. Bonds-    I just need help with part D, Thanks!

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PRACTICE QUESTIONS 1-3 1.A company issued 5%, 20-year bonds with a face amount of $80 million. The market yield for bonds of similar risk and maturity is 6%. Interest is paid semiannually. At what price did the bonds sell? 2.A company issued 6%, 15-year bonds with a face amount of $75 million. The market yield for bonds of similar risk and maturity is 6%. Interest is paid semiannually. At what price did the bonds sell? 3. A company issued 5%, 20-year bonds with a face amount of $100 million. The market yield for bonds of similar risk and maturity is 4%. Interest is paid semiannually. At what price did the bonds sell?

Marketable Debt Securities Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. a. Loudder Inc. purchases 10,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%. b. Loudder receives semi-annual cash interest of $200,000. c. Year-end fair value of the bonds is $978 per bond. d. Shortly after year-end, Loudder sells all 10,000 bonds for $970 per bond. Use negative signs with answers, if appropriate. Transaction Loudder purchases bonds. Loudder receives cash interest. Bonds year-end fair value is determined. Loudder sells all bonds Cash Asset + Noncash Assets Balance Sheet = Liabilities + Contrib. Captial + Earned Capital Revenues Income Statement Expenses = Net income

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Determining Selling Prices of Bonds Under Different Interest Assumptions Olay Inc. issues $50,000, 8%, 10-year bonds payable on January 1, 2020. Calculate the selling price of the bonds under the following separate assumptions. • Round your answer to the nearest whole number. • Do not use negative signs with your answers. a. The bonds pay cash interest annually ($4.000) and the market rate of interest on similar bonds is 10%. b. The bonds pay cash interest annually (54.000) and the market rate of interest on similar bonds is 8%. c. The bonds pay cash interest annually ($4.000) and the market rate of interest on similar bonds is 6%. d. The bonds pay cash interest semiannually ($2.000) and the market rate of interest on similar bonds is 10%. S e. The bonds pay cash interest semiannually ($2.000) and the market rate of interest on similar bonds is 8%, s f. The bonds pay cash interest semiannually ($2.000) and the market rate of interest on similar bonds is 6%. %24 47,738 x 50.000 v 52,600…