Question: On January 1, 2011, Arlo Corp. issued $3,000,000 face value, 12% coupon rate, 10-year bonds which pay interest semi-annually. If the market rate of interest

On January 1, 2011, Arlo Corp. issued $3,000,000 face value, 12% coupon rate, 10-year bonds which pay interest semi-annually. If the market rate of interest was 14% (compounded semi-annually), the issue price of the bonds should be?

a. $3,344,098. b. $2,687,033. c. $3,000,000. d. $2,682,180.

I got the answer as A ,why the true answer is D?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Which of the following bank items would not be included in the Cash account? Checking account balance Checks from customers not deposited Certificate of deposit Savings account 3.33 points QUESTION 2...

1. Financial Statements prepared in accordance with GAAP for external decision-makers are known asgeneral purpose financial statements True False 2. Recognition is the process of recording an...

*On January 1, 2011, Gless Textiles issued $14 million of 9.7%, 10-year convertible bonds at 102. The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 50 shares of...

Callable bonds may be Turned in for early retirement at the option of the bondholder Converted to common stock at the option of the bondholder Called for early retirement at the option of the issuer...

PROBLEM Requireed A. On January 1, 2013 Frederick Corp. issued bonds with a maturity value of stated rate of interest on the bonds is 8% per annum payable $2,000,000. The semiannually each June 30...

Question 5 On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $2,800,000. The bonds pay interest semiannually. The market rate of interest is 9.5% and the bond...

On January 1, 2010, Drennen, Inc., issued $3 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31...

I had attached with the problem. I need help solution with explanation. Thank you so much. God bless you! ACC 202 Exam 1 Name_______________________________________________________ For computational...

Please see the attachment. Chapter 14 Accounting Complete a balance sheet for Bugant, Inc. at December 31, 2012 and an income statement for the year ending December 31, 2011. Assume semi-annual...

For May and June, the total sales are 200,000 and 210,000, respectively. Cost of goods sold (CGS) 65%. Variable cost (VC) 20%. Fixed monthly costs (FC) 12,000. Depreciation included in FC 4,000....

The rotor speed of a synchronous generator is 900 rpm. If the system frequency is 60 Hz. find the number of poles of the generator.

Duo Corporation is evaluating a project with the following cash flows: YearCash Flow 0 $ 1 6 , 1 0 0 1 7 , 2 0 0 2 8 , 4 0 0 3 8 , 0 0 0 4 6 , 8 0 0 5 4 , 2 0 0 The company uses an interest rate of 1...

The first scenario will be a Verbal Judo scenario in which your scenario follows the standard Verbal Judo interaction: You need to ask somebody to modify their behavior either to do something or to...

2. Observe a press conference on television. Who is being interviewed? Who is conducting the interview? What is the goal of the press conference? How is control distributed? List five questions that...

5. Create a questionnaire that you will use the next time you visit a physician. Focus your questions on what is already known about your condition and what you want to know about possible treatment....

4. Devise an interview strategy from the interviewers point of view