Denis purchased a $10,000 face value Ontario Hydro Energy bond maturing in four years. The coupon rate was 6.8% payable semiannually. If the prevailing market rate at the time of purchase was 6.1% compounded semiannually, what price did Denis pay for the bond? (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Assume that: • Bond interest is paid semiannually. . The bond was originally issued at its face value. • Bonds are redeemed at their face value at maturity. • Market rates of return are compounded semiannually. Coupon Payment Bond price

Denis purchased a $10,000 face value Ontario Hydro Energy bond maturing in four years. The coupon rate was 6.8% payable semiannually. If the prevailing market rate at the time of purchase was 6.1% compounded semiannually, what price did Denis pay for the bond? (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Assume that: • Bond interest is paid semiannually. . The bond was originally issued at its face value. • Bonds are redeemed at their face value at maturity. • Market rates of return are compounded semiannually. Coupon Payment Bond price

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

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Denis purchased a $10.000 face value Ontario Hydro Energy bond maturing in four years. The coupon rate was 8% payable semiannually. f the prevailing market rate at the time of purchase was 74% compounded semiannually, what price did Denis pay for the bond? (Do not round the intermediete calculations. Round your final answer to 2 decimal places) Assume that • Bond interest s paid semiannually The bond was originallyissued at its face value · Bonds are redeemed at their face value at maturity Market rates of return are compounded semiannually Bond price
Last year, Kevin Thomas purchased a $1000 Campbell Manufacturing corporate bond with an annual interest rate of 7.25%. The bond's current market price is $770. Calculate the following. If necessary, round all answers to two decimal places. If necessary, refer to the list of financial formulas. 1. Annual interest: 2. Current yield: $0 0% X S
Kimberly purchased a $6,500 bond that was paying a 6.75% compounded semi- annually coupon rate and had 3 more years to maturity. The yield rate at the time of purchase was 5.75% compounded semi-annually. a. How much did Kimberly pay for the bond? Round to the nearest cent b. What was the amount of premium or discount on the bond?
San Miguel Company's 18-year, $1,000 par value bonds pay 6.5 percent interest annually. The market price of the bond is $1,105, and your required rate of return is 8.5 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you given your required rate or return. c. Should you purchase the bond? Why or why not? (*You must show your calculation process as well.)
Vincent purchased a $3,500 bond that was paying a 5.50% coupon rate and had 4 more years to mature. The yield at the time of purchase was 4.20% compounded semi-annually. a. How much did Vincent pay for the bond? Round to the nearest cent b. What was the amount of premium or discount on the bond?
Larry's Bank buys 58 bonds of the Puppet House Corp. through a broker. The bonds pay 10 percent annual interest. The yield to maturity (market rate of interest) is 12 percent. The bonds have a 10 year maturity. Using an assumption of semi-annual interest payments: A. Compute the price of a bond. B. Compute the total value of the 58 bonds.
Assume that three years ago, you purchased a corporate bond that pays 6.50 percent. The face value of the bond was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 7.00 percent. (a) What is the annual dollar amount of interest that you receive from your bond investment? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Annual interest (b) Assuming that comparable bonds are paying 7.00 percent, what is the approximate dollar price for which you could sell your bond? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Approximate bond price
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The Florida Investment Funds buys 58 bonds of the Gator Corp. through a broker. The bond pays 10 percent annual interest. The Yield to Maturity (market rate of interest) is 12 percent. The bonds have a 10-year maturity. Calculate your final answer using the formula and financial calculator methods. Using an assumption of semiannual interest payments: a) Compute the price of a bond (Do not round intermediate calculations and round your answer 2 decimal places. b) Compute the total value of 58 bonds (Do not round intermediate calculations and round your answer 2 decimal places).
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