Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 14, Problem 15QS
To determine
Compute the selling price of the bond.
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Compute the selling price of 12.00%, 15-year bonds with a par value of $440,000 and semiannual interest payments. The annual market rate for these bonds is 10.00%. Use present value Table B.1 and Table B.3 in Appendix B.
Note: Round all table values to 4 decimal places
Compute the selling price of 10%, 10-year bonds with a par value of $210,000 and semiannual interest payments. The annual market rate for these bonds is 12%. Use present value Table B.1 and Table B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations.)
Table B.1* Present Value of 1p = 1 / (1 + i)n
Rate
Periods
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
12%
15%
Periods
1
0.9901
0.9804
0.9709
0.9615
0.9524
0.9434
0.9346
0.9259
0.9174
0.9091
0.8929
0.8696
1
2
0.9803
0.9612
0.9426
0.9246
0.9070
0.8900
0.8734
0.8573
0.8417
0.8264
0.7972
0.7561
2
3
0.9706
0.9423
0.9151
0.8890
0.8638
0.8396
0.8163
0.7938
0.7722
0.7513
0.7118
0.6575
3
4
0.9610
0.9238
0.8885
0.8548
0.8227
0.7921
0.7629
0.7350
0.7084
0.6830
0.6355
0.5718
4
5
0.9515
0.9057
0.8626
0.8219
0.7835
0.7473
0.7130
0.6806
0.6499
0.6209
0.5674
0.4972
5
6
0.9420
0.8880
0.8375
0.7903
0.7462
0.7050
0.6663
0.6302
0.5963
0.5645
0.5066
0.4323
6
7
0.9327
0.8706
0.8131
0.7599…
Complete the below table to calculate the price of a $1 million bond issue under each of the following independent assumptions (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1): 1. Maturity 10 years, interest paid annually, stated rate 10%, effective (market) rate 12%.2. Maturity 10 years, interest paid semiannually, stated rate 10%, effective (market) rate 12%.3. Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%.4. Maturity 20 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%.5. Maturity 20 years, interest paid semiannually, stated rate 12%, effective (market) rate 12%.
Chapter 14 Solutions
Principles of Financial Accounting.
Ch. 14 - A bond traded at 97 means that a. The bond pays...Ch. 14 - Prob. 2MCQCh. 14 - Prob. 3MCQCh. 14 - Prob. 4MCQCh. 14 - Prob. 5MCQCh. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQ
Ch. 14 - Prob. 6DQCh. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQCh. 14 - Prob. 11DQCh. 14 - Prob. 12DQCh. 14 - Prob. 13DQCh. 14 - Prob. 14DQCh. 14 - Prob. 15DQCh. 14 - Prob. 16DQCh. 14 - Prob. 17DQCh. 14 - Prob. 18DQCh. 14 - Prob. 19DQCh. 14 - Bond financing Identify the following as either an...Ch. 14 - Prob. 2QSCh. 14 - Prob. 3QSCh. 14 - Prob. 4QSCh. 14 - Prob. 5QSCh. 14 - Prob. 6QSCh. 14 - Prob. 7QSCh. 14 - Prob. 8QSCh. 14 - Prob. 9QSCh. 14 - Prob. 10QSCh. 14 - Prob. 11QSCh. 14 - Prob. 12QSCh. 14 - Bond features and terminology Enter the letter of...Ch. 14 - Prob. 14QSCh. 14 - Prob. 15QSCh. 14 - Prob. 16QSCh. 14 - Prob. 17QSCh. 14 - Prob. 18QSCh. 14 - Prob. 19QSCh. 14 - Prob. 20QSCh. 14 - Prob. 1ECh. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - Prob. 4ECh. 14 - Prob. 5ECh. 14 - Prob. 6ECh. 14 - Duval Co. issues four-year bonds with a 100,000...Ch. 14 - Prob. 8ECh. 14 - Prob. 9ECh. 14 - Prob. 10ECh. 14 - Prob. 11ECh. 14 - Prob. 12ECh. 14 - Prob. 13ECh. 14 - Prob. 14ECh. 14 - Prob. 15ECh. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Prob. 19ECh. 14 - In each of the following separate cases, indicate...Ch. 14 - Prob. 21ECh. 14 - Prob. 22ECh. 14 - Prob. 1APCh. 14 - Prob. 2APCh. 14 - Prob. 3APCh. 14 - Prob. 4APCh. 14 - Prob. 5APCh. 14 - Prob. 6APCh. 14 - Prob. 7APCh. 14 - Prob. 8APCh. 14 - Prob. 9APCh. 14 - Prob. 10APCh. 14 - Prob. 11APCh. 14 - Refer to the lease details in Problem 14-11A....Ch. 14 - Prob. 1BPCh. 14 - Prob. 2BPCh. 14 - Prob. 3BPCh. 14 - Prob. 4BPCh. 14 - Prob. 5BPCh. 14 - Prob. 6BPCh. 14 - Prob. 7BPCh. 14 - Prob. 8BPCh. 14 - Prob. 9BPCh. 14 - Prob. 10BPCh. 14 - Prob. 11BPCh. 14 - Prob. 12BPCh. 14 - Prob. 14SPCh. 14 - Prob. 1AACh. 14 - Prob. 2AACh. 14 - Prob. 3AACh. 14 - Prob. 1BTNCh. 14 - Prob. 2BTNCh. 14 - Prob. 3BTNCh. 14 - Prob. 5BTN
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