Thompson Corporation is planning to issue $100,000, seven-year, 8 percent bonds. Interest is payable each December 31.

Question:

Thompson is planning to issue $100,000, seven-year, 8 percent bonds. Interest is payable each December 31. All of the bonds will be sold on January 1, 2009.

Required:
Compute the issue (sale) price on January 1, 2009, for each of the following independent cases (show computations):
a. Case A: Market (yield) rate, 8 percent.
b. Case B: Market (yield) rate, 6 percent.
c. Case C: Market (yield) rate, 10 percent.

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...