3. On January 1, Russel Corp. issued 8-year bonds with a face value of $100,000 and a stated annual coupon rate of 6%, payable semiannually on June 30 and Dec. 31 of each year. The bonds were sold to yield an annual effective market rate of 8%. Present values interest factors from time-value-of-money tables are shown below. Note: If you use financial calculators or Excel instead of the interest factors, the rounding error could be as much as $10. These bonds will sell for a total price of: (A) $88,356 (B) $99,983 (C) $112,544 (D) $81,330 (E) None of the above.
3. On January 1, Russel Corp. issued 8-year bonds with a face value of $100,000 and a stated annual coupon rate of 6%, payable semiannually on June 30 and Dec. 31 of each year. The bonds were sold to yield an annual effective market rate of 8%. Present values interest factors from time-value-of-money tables are shown below. Note: If you use financial calculators or Excel instead of the interest factors, the rounding error could be as much as $10. These bonds will sell for a total price of: (A) $88,356 (B) $99,983 (C) $112,544 (D) $81,330 (E) None of the above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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