arch No resultsOptions Homework Help Save&Exit; Adonis Corporation issued 10.yea

Question

arch No resultsOptions Homework Help Save&Exit; Adonis Corporation issued 10.year. 7% bonds with a par value of $160.000. Interest is paid semian $171,906 in cash proceeds. Which of the following statements is true? nually. The market rate on the issue date was 6%. Adonis received Adonis must pay $160,000 at maturity plus 20 interest payments of $4.800 each Adonis must pay $171,906 at maturity and no interest payments Adonis must pay $160,000 at maturity and no interest payments Adonis must pay $17/1,906 at maturity plus 20 interest payments of $5.600 each Prev of8l Next >

Explanation / Answer

Correct answer is C.

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Coupon is paid on the par value.

So annual coupon will be = 160000* .07 = 11200

Semi-annual coupon = 5600

Moreover at the maturity of the bond, par value of the bond is paid to to bond holder.

So correct answer is C

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Hope this answer your query.

Feel free to comment if you need further assistance. J

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