Reynolds Co. issued $75 million face amount of 6% bonds when market interest rates were 5.81% for
Question:
Reynolds Co. issued $75 million face amount of 6% bonds when market interest rates were 5.81% for bonds of similar risk and other characteristics.
Required:
a. How much interest will be paid annually on these bonds?
b. Were the bonds issued at a premium or discount? Explain your answer.
c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? Explain your answer.
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a Annual interest payment 75 million 6 4500000 b The bonds were issued at a premium because ma...View the full answer
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