Question

# On September 30, 2018, the San Fillipo Corporation issued 8% stated rate bonds with a face...

On September 30, 2018, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of \$220 million. The bonds mature on September 30, 2038 (20 years). The market rate of interest for similar bonds was 10%. Interest is paid semiannually on March 31 and September 30. ((FV of \$1, PV of \$1, FVA of \$1, PVA of \$1, FVAD of \$1 and PVAD of \$1) (Use appropriate factor(s) from the tables provided.)

Required:
Determine the price of the bonds on September 30, 2018. (Enter your answers in whole dollars. Round your final answers to nearest whole dollar amount.)

 (note there will be slight difference in issue price calculation ,kindly use the factors as given inn your question to get exact answer) Bond characterstics Amount 1-a) Principal 220,000,000 interest 8,800,000 Market interest rate 5% periods to maturity 40 issue price 182,250,992 Calculation of bond issue price Where i= 5.00% t= 40 principal * PV of \$1 at 5% for 40 yrs = 220,000,000 * 0.14205 = 31251000 interest * PV of ordinary annuity at 5%= 8800000 * 17.15909 = 150999992 bond issue price 182250992

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