On June 30, 2010, the Watson Corporation sold $800,000 of 11 face value bonds for $761,150 96 On December 31, 2010 the Watson Corporation sold $700,000 of this same bond issue for $734,645 28 The bonds were dated January 1, 2010, pay interest semiannually on each December 31 and June 30, and are du...

June 30 2010 issuance The effective annual interest rate is 12 ...

On June 30, 2010, the Watson Corporation sold $800,000 of 11% face value bonds for $761,150.96. On

Question:

On June 30, 2010, the Watson sold $800,000 of 11% bonds for $761,150.96. On December 31, 2010 the Watson sold $700,000 of this same bond issue for $734,645.28. The bonds were dated January 1, 2010, pay interest semiannually on each December 31 and June 30, and are due December 31, 2017.

Required
Compute the effective yield rate on each issuance of the Watson 11% bonds.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...