The face value of a bond is $50,000, its stated rate is 6% and the term...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The face value of a bond is $50,000, its stated rate is 6% and the term of the bond is five years. The bond pays interest semiannually. At the time of issue, the market rate is 8%. What is the present value of the bonds at issuance? Present value of $1: 4% 5% 0.822 0.784 6% 7% 8% 0.747 0.713 0.681 5 6 0.790 0.746 0.705 0.666 0.630 7 0.760 0.711 0.665 0.623 0.583 8 0.731 0.677 0.627 0.582 0.703 0.645 0.592 0.544 9 10 0.676 0.614 0.558 0.508 0.540 0.500 0.463 Present value of ordinary annuity of $1: 4% 5% 6% 7% 4.452 4.329 4.212 4.100 5 6 7 8 9 10 8% 3.993 4.623 5.242 5,076 4.917 4.767 5.786 5.582 5.389 5.206 6.002 6.463 6.210 5.971 5.747 6.733 7.435 7.108 6.802 6.515 6.247 8.111 7.722 7.360 7.024 6.710 The face value of a bond is $50,000, its stated rate is 6% and the term of the bond is five years. The bond pays interest semiannually. At the time of issue, the market rate is 8%. What is the present value of the bonds at issuance? Present value of $1: 4% 5% 0.822 0.784 6% 7% 8% 0.747 0.713 0.681 5 6 0.790 0.746 0.705 0.666 0.630 7 0.760 0.711 0.665 0.623 0.583 8 0.731 0.677 0.627 0.582 0.703 0.645 0.592 0.544 9 10 0.676 0.614 0.558 0.508 0.540 0.500 0.463 Present value of ordinary annuity of $1: 4% 5% 6% 7% 4.452 4.329 4.212 4.100 5 6 7 8 9 10 8% 3.993 4.623 5.242 5,076 4.917 4.767 5.786 5.582 5.389 5.206 6.002 6.463 6.210 5.971 5.747 6.733 7.435 7.108 6.802 6.515 6.247 8.111 7.722 7.360 7.024 6.710
Expert Answer:
Answer rating: 100% (QA)
Answar PU CX 1 1nt r C 00 6 X 50000 2 r 008 20 004 004 f 1... View the full answer
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
Posted Date:
Students also viewed these accounting questions
-
Use the attached "words.txt" file to store the words along with their ranks in an AVL tree. Then provide the user the option to search for any word. If the word exists the program displays the rank...
-
After purchasing Elmtree House Georgina decides to lease part of the property, "The Stables" to her neighbour Maxine Baker for three years. She draws up a document which describes itself as a deed...
-
In the late 1980s, various states and the US Congress debated placing limits on sulfur emissions to reduce the impact of acid rain. Utilities that generated electricity using coal-powered plants felt...
-
After running stories on current First Lady Michelle Obama and former vice presidential candidate Sarah Palin on consecutive weeks, USA Weekend magazine asked its readers on Mother's Day, "Who would...
-
(a) Explain the purpose of the two accounts: Depreciation Expense and Accumulated Depreciation. (b) What is the normal balance of each account? (c) Is it customary for the balances of the two...
-
National Life Expectancies. We continue the analysis begun in Exercises 1.7and 2.22 Now fit a regression model on LIFEEXP using three explananatural logarithmic transform of PRIVATEHEALTH). a....
-
The Home and Garden (HG) chain of superstores imports decorative planters from Italy. Weekly demand for planters averages 1,500 with a standard deviation of 800. Each planter costs $ 10. HG incurs a...
-
If the indirect method is used to calculate the intrinsic value of a company's equity. How to compare the intrinsic value per share and the value per share?
-
In the circuit of Fig. 5.59 , calculate v o of v s = 2 V. 8 k2 2 k2 4 k2 4 k2 Vo Vs (+I) + I
-
What are the 8 symbols in Edgar Allan Poe's Fall of the House of Usher?
-
= = A groundhog is being pursued by a vicious coyote. The groundhog begins running from rest and with constant ac- celeration toward the entrance to its underground burrow, which will provide it with...
-
The angle of diffraction in a plane transmission grating is 30 for the second-order maxima of wavelength of 5 x 10-5 cm. There will be lines in one cm on the surface of the grating. 1. 100 2. 10 3....
-
A ring with a clockwise current (as seen from above the ring) is situated with its center directly above another ring, which has a counter-clockwise current, as shown in Figure 20.7. In what...
-
1. An island castaway spends eight hours each day acquiring two items-coconuts and fish-based on the following production possibilities schedule. Production Scenario A B C D Coconuts Fish 24 20 12 O...
-
Three charged marbles are glued to a nonconducting surface and are placed in the diagram as shown. The charges of each marble are 9 = 5.80 C, 9 = 1.73 C, and 93 = -1.94 C. Marble q is a distance r =...
-
Q4: Identify one individual whom you consider as intelligent. List about 10 creative qualities which you observe.
-
Below is a sample of the data in the file NFLAttendance which contains the 32 teams in the National Football League, their conference affiliation, their division, and their average home attendance....
-
The life of electric lightbulbs is known to be a normally distributed random variable with unknown mean and standard deviation 200 hours. The value of a lot of 1,000 bulbs is (1,000) (1/5,000) ...
-
Repeat Prob. 4.3-3, using the tabular form of the simplex method.
-
The maintenance base for Friendly Skies Airline has facilities for overhauling only one airplane engine at a time. Therefore, to return the airplanes to use as soon as possible, the policy has been...
-
Why can staging investment decisions add value?
-
How do you use a decision tree to make the best investment decision?
-
How can you identify a real option in a decision tree?
Study smarter with the SolutionInn App