A1 Ultimate Butter Popcorn Issues 596, 15-year bonds with a tace amount of $55,0

Question

A1

Ultimate Butter Popcorn Issues 596, 15-year bonds with a tace amount of $55,000. The market Interest rate for bonds of slmllar risk and maturity Is 5%. Interest Is pald semiannually. At what price will the bonds issue? (EV of S1, PV of $1, EVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Round"Market interest rate" to 1 decimal place.) Bond Characteristics Face mount Interest payment Market nterest rate Periads to maturity Issue pnice 55,000

Explanation / Answer

n= 2.50% t= 30 year Amount Bond Characterstics face amount 55,000 Interest payment 1375 Market interest rate 2.50% periods to maturity 30 issue price 55,000 since the contract rate and market rate are same the bonds are issued at par

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