General Accounting A bond has a par value of $100. It pays 10 percent interest.1,000 are issued. How much capital is raised?A) $110,000B) $100,000C) $10,000 per yearD) $90,000Explain your answer.

Step 1: Introduction to the CapitalThe resources that are used to generate wealth are known as…

Answered: A bond has a par value of $100. It pays…

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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You purchase a $10,000 bond with a bond rate of 6% per year payable semiannually for 2 years. You pay $9,600 for the bond. Which statement is correct?
3. Assume you purchased a bond for $9,186. The bond pays $300 interest every six months. You sell the bond after 18 months for $10,000. Calculate the following: a. Income. b. Capital gain (or loss). c. Total return in dollars and as a percentage of the original investment. Review Only Click the icon to see the Worked Solution. a. The current income is $ (Round to the nearest dollar.) b. The capital gain (or loss) is $ (Enter a loss as a negative number and round to the nearest dollar.) c. The total return in dollars is $ (Round to the nearest dollar.) The total return as a percentage of the original investment is %. (Enter as a percentage and round to two decimal places.)
The Saleemi Corporation's $1,000 bonds pay 6 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,155. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%.
Marty Corp is issuing a perpetual bond today that will pay $100 per year starting in 3 years. If the cost of capital is 5%, what is the value of this bond today? Choose the closest. a) $2,000 b) $2,124 c) $1,997 d) $1,814
Q4. A long term bond with a face value of $10,000 has a bond interest rate of 6% per year pay: quarterly. What are the amount of the interest payments? (a) $160 (b) $150 (c) $170 (d) $155 (e) your answer (... ......)
The saleemi corporation’s is $1,000 bonds pay 9 percent interest rate annually and have 9 years until maturity. You can purchase the bond for $935. A. What is the yield to maturity on this bond? B. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 9 percent ? A. The yield to maturity on the saleemi bonds is Round to two decimal places
A bond promises to pay $5,350 next year. The interest rate on this bond is 7%. The price of this bond today must be: a. $5,000 b. $5,100 c. $5,200 d. $5,240
Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,075. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.) Part 2 b. You ▼ should should not purchase the bonds because your yield to maturity on the Saleemi bonds is ▼ greater less than the one on a comparable risk bond. (Select from the drop-down menus.)
(Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 11 years until maturity. You can purchase the bond for $945. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 14 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.)
The Saleemi Corporation's $1,000 bonds pay 5 percent interest annually and have 13 years until maturity. You can purchase the bond for $865. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 8 percent?
Whittier Inc. offers you a $1,000 bond with 5 years to maturity, annual payments. Assume that the interest rate is 8%, and coupon rate is 10%. How much should you pay for this bond (rounded to integer)? O $1,080.00 O $1,008.00 O $1,000.00 O $1,076.00
A bond pays $50,000 per year and has a face value of $500,000 at theend of 8 years when it has to be redeemed. If its current discounted priceis $390,000, what true interest could be earned on the bond? Ans. (14.9%)

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A bond has a par value of $100. It pays 10 percent interest. 1,000 are issued. How much capital is raised? A) $110,000 B) $100,000 C) $10,000 per year D) $90,000 Explain your answer.