cardelia is issuing 20-year $1,000 bonds to finance a theme park based on the movie. The bonds will be issued on April 1, 2019, and will mature on April 1, 2039. The interest stated on the bond is 7%. The bonds were printed months ago with a special movie version and a coffee table book. The market rate for these bonds on April 1, 2019, will be 6% instead of 7% that were printed on the paper. The bonds will be sold initially on the first day at a premium to account for changes in interest rates.A) What will the price of the bonds be at issue date (note: it is not $1,000 because of the interest rate change)?B) What is the future value of these bonds?
cardelia is issuing 20-year $1,000 bonds to finance a theme park based on the movie. The bonds will be issued on April 1, 2019, and will mature on April 1, 2039. The interest stated on the bond is 7%. The bonds were printed months ago with a special movie version and a coffee table book. The market rate for these bonds on April 1, 2019, will be 6% instead of 7% that were printed on the paper. The bonds will be sold initially on the first day at a premium to account for changes in interest rates.A) What will the price of the bonds be at issue date (note: it is not $1,000 because of the interest rate change)?B) What is the future value of these bonds?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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need all as
![cardelia is issuing 20-year $1,000 bonds to finance a theme park
based on the movie. The bonds will be issued on April 1, 2019,
and will mature on April 1, 2039. The interest stated on the bond
is 7%. The bonds were printed months ago with a special movie
version and a coffee table book. The market rate for these bonds
on April 1, 2019, will be 6% instead of 7% that were printed on the
paper. The bonds will be sold initially on the first day at a
premium to account for changes in interest rates.A) What will the
price of the bonds be at issue date (note: it is not $1,000
because of the interest rate change)?B) What is the future value
of these bonds?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F136a5f16-caa6-47a6-8b6e-8174b31f045f%2Fe6c70ace-9b43-448f-a579-7f2ca70068f6%2F61zcexl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:cardelia is issuing 20-year $1,000 bonds to finance a theme park
based on the movie. The bonds will be issued on April 1, 2019,
and will mature on April 1, 2039. The interest stated on the bond
is 7%. The bonds were printed months ago with a special movie
version and a coffee table book. The market rate for these bonds
on April 1, 2019, will be 6% instead of 7% that were printed on the
paper. The bonds will be sold initially on the first day at a
premium to account for changes in interest rates.A) What will the
price of the bonds be at issue date (note: it is not $1,000
because of the interest rate change)?B) What is the future value
of these bonds?
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