Question

On January 1, 2018, Water Wonderland issues $10 million of 9% bonds, due in nine years,...

On January 1, 2018, Water Wonderland issues $10 million of 9% bonds, due in nine years, with interest payable semiannually on June 30 and December 31 each year. Use Table 2 and Table 4.

1. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. (Round "PV Factor" to 5 decimal places. Round other intermediate calculations and final answer to the nearest dollar amount. Enter your answer in dollars, not in millions.)

The bonds issue at.... and the issue price is.....

2. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. (Round "PV Factor" to 5 decimal places. Round other intermediate calculations and final answer to the nearest dollar amount. Enter your answer in dollars, not in millions.)

The bonds issue at.... and the issue price is.....

3. If the market rate is 10%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. (Round "PV Factor" to 5 decimal places. Round other intermediate calculations and final answer to the nearest dollar amount. Enter your answer in dollars, not in millions.)

The bonds issue at.... and the issue price is.....

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2018, Water World issues $25.9 million of 6% bonds, due in 20 years,...
On January 1, 2018, Water World issues $25.9 million of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world’s largest water avalanche and the “tornado”— a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. 1-a. If the market rate is 5%, calculate the issue price....
On January 1, 2018, Frontier World issues $39.1 million of 9% bonds, due in 20 years,...
On January 1, 2018, Frontier World issues $39.1 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and...
On January 1, 2021, Water World issues $25.9 million of 6% bonds, due in 20 years,...
On January 1, 2021, Water World issues $25.9 million of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world’s largest water avalanche and the “tornado”— a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. 1-a. If the market rate is 5%, calculate the issue price....
On January 1, 2021, Frontier World issues $39.8 million of 8% bonds, due in 15 years,...
On January 1, 2021, Frontier World issues $39.8 million of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 2-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1,...
Windsor Corporation issues $570,000 of 9% bonds, due in 10 years, with interest payable semiannually. At...
Windsor Corporation issues $570,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds $enter the issue price of the bonds rounded to 0 decimal places
M Corporation issues $460,000 of 9% bonds, due in 11 years, with interest payable semiannually. At...
M Corporation issues $460,000 of 9% bonds, due in 11 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. *see the future value/present value factor table* Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds $enter the issue price of the bonds rounded to 0 decimal places
Providence Industries has an outstanding debenture of $25 million that was issued when flotation costs could...
Providence Industries has an outstanding debenture of $25 million that was issued when flotation costs could be expensed immediately. It carries a coupon rate of 10 percent and has 15 years to maturity. Currently, similar risk bonds are yielding 9 percent over a 15-year period, and Providence is wondering if a refunding would be economically sound. The existing debenture has a call premium of 5 percent at present. It is estimated that a new issue would require underwriting costs of...
Christmas Anytime issues $710,000 of 5% bonds, due in 10 years, with interest payable semiannually on...
Christmas Anytime issues $710,000 of 5% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: 1. The market interest rate is 5% and the bonds issue at face amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate...
Suppose your company needs to raise $36 million and you want to issue 20-year bonds for...
Suppose your company needs to raise $36 million and you want to issue 20-year bonds for this purpose. Assume the required return on your bond issue will be 8.5 percent, and you’re evaluating two issue alternatives: an 8.5 percent semiannual coupon bond and a zero coupon bond. Your company’s tax rate is 35 percent. Both bonds would have a face value of $1,000.    a. How many of the coupon bonds would you need to issue to raise the $36...
Christmas Anytime issues $730,000 of 6% bonds, due in 15 years, with interest payable semiannually on...
Christmas Anytime issues $730,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year.     Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: Required: 1. a) The market interest rate is 6% and the bonds issue at face amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT