Marwick Corporation issues 28%, 5 year bonds with a par value of 1,200,000 and semiannual interest payments.

Question:

Marwick issues 28%, 5 year bonds with a of 1,200,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 26%. What is the bond's issue (selling) price, assuming the Present Value of $1 factor for 13.0% and 10 semi-annual periods is 0.2946 and the present value of an factor for the same rate and period is 5.4262?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... 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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...