5. Compute the price of $86,708,402 received for the bonds by using the Present value at compound interest, and Present value of an annuity. Round your PV values to 5 decimal places and the finalanswers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences.Present value of the face amount29,058,178 XPresent value of the semi-annual interest payments57,650,184 XProceeds of bond issue86,708,402

The objective of the question is to verify the price of the bonds received using the present value…

Answered: 5. Compute the price of $86,708,402…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's simple interest rate r. P = $3800.00, A = $3885.50, t = 3 months S % (Round to the nearest tenth of a percent as needed.)
1. Use MV = P(1 + RT) to find the maturity value (in $) of the loan. (Round your answer to two decimal places.) Principal Rate (%) Time Maturity Value $5,600 7.4 14 months 2Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round your answers to the nearest cent. CompoundAmount Term ofInvestment NominalRate (%) InterestCompounded PresentValue CompoundInterest $6,000 12 years 6 semiannually $ $
Determine the price of a single bond given the following information. Round your final answer to two decimal places. For example, if your answer is $89.12, enter 89.12 with no currency symbol. 4.39% Cost of Debt (Kd) The company is expected to pay the following forecasted CFFD (Cash Flows For Debt): Year 1: $50.00 interest payment Year 2: $50.00 interest payment Year 3: $50.00 interest payment Year 4: $50.00 interest payment Year 5: $50.00 interest payment The company will also pay the bond's face value of $1,000.00 at the end of year 5. The company faces a 25% tax rate. Type your answer...
Suppose the current interest rate on a one-year bond is 2% and the current interest rate on a two-year bond is 4%. The term premium on a two-year bond is 1%. According to the expectations hypothesis, what interest rate should we expect on a one-year bond next year? Answer as a percentage to one decimal place and do not include symbols (e.g. $, %, commas) in your answer. Answer:
All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the deposit or investment period. Each line on the following graph corresponds to an interest rate: 0%, 8%, or 16%. Identify the interest rate that corresponds with each line. VALUE (Dollars) Line A: 01 2 3 4 5 Line B: 6 B Line C: C 7 8 9 10 TIME (Years) Investments and loans base their interest calculations on one of two possible methods: the interest and the interest methods. Both methods apply three variables-the amount of principal, the interest rate, and the investment or deposit period to the amount deposited or invested in order to compute the amount of interest. However, the two methods differ in their relationship between the variables.
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The principal P is borrowed at a simple interest rate r for a period of time t. Find the loan's future value A, or the total amount due at time t. P = $3000, r = 8%, t = 4 years $ (Round to the nearest cent as needed.) O
2. Find the present value of $500 due in the future under each of these conditions: a. 12% nominal rate, semiannual compounding, discounted back 5 years b. 12% nominal rate, quarterly compounding, discounted back 5 years c. 12% nominal rate, monthly compounding, discounted back 1 year Hint: identify the interest rate per period and the total number of periods in each scenario first. O
Problem 2 [5] The following spot rates are observed in the market t (years) is (%) 1 6.50 2 6.68 6.84 4 6.95 7.12 > 6 7.50 ABC Ltd. borrows $100 millions at floating interest rates for 10 years. Level interest- only repayments are made annually at the end of the year. To reduce their interest rate risk ABC Ltd. wants to enters a interest rate swap as a fixed-rate payer. a) Calculate the swap rate based on the current information.
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What is the discounted value (present value), and compound discount (interest) of a debt of $76,800.00 due 2 years from now if interest is 3.58% compounded monthly? Round all answers to two decimal places if necessary. P/Y = PV = $ % C/Y = PMT = $ Compound Discount = $ N = FV = $ I/Y =

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