Question: A company issues 5 - year 1 5 % bonds with an $ 3 9 2 , 0 0 0 face value. The bonds are

A company issues

5 -

year

15 %

bonds with an $

392, 000

face value. The bonds are to be compounded semiannually

(

twice per year

) .

On the bond issue date the effective interest rate

(

market rate

)

of similar bonds is

11 % .

What is the ambunt of the discount or premium at which the bond should be purchased?

Round you answer to the nearest dollar.

If a premium, enter the number as a positive. If a negative, enter the number as a negative

(" ")

Make sure to use the entire factor provided on the table in your syllabus for relevant calculations. No credit will be given to answers which were calculated using rounded factors.

A company issues 5-year 15% bonds with an $392,000 face value.

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