1.) A Company issued a $100,000, 20 year bond with a stated interest rate of 6%.
ID: 2353297 • Letter: 1
Question
1.) A Company issued a $100,000, 20 year bond with a stated interest rate of 6%. Assume interest payments are made annually. What is the selling price of the bond if the market rate of interest is 9%? (Round to the nearest dollar.)2.) A Company issued a $50,000, 10 year bond with a stated interest rate of 6%. Assume interest payments are made semi-annually. If the market rate of interest is 5%, the bond will sell at
a) face value.
b) a discount.
c) a premium.
3.) A Company issued a $100,000, 20 year bond with a stated interest rate of 6%. Assume interest payments are made annually. If the market rate of interest is 8%, the bond will sell at
a) face value.
b) a premium.
c) a discount.
4.) A company issued a $50,000, 10 year bond with a stated interest rate of 6%. Assume interest payments are made semi-annually. What is the selling price of the bond if the market rate of interest is 5%? (Round to the nearest dollar.)
5.) A Company issued a $30,000, 20 year bond with a stated interest rate of 7%. Assume interest payments are made annually. What is the selling price of the bond if the market rate of interest is 7%? (Round to the nearest dollar.)
Explanation / Answer
2.face value 3.discount
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