Exodus Limousine Company has $1,000 par value bonds outstanding at 10 percent interest. The bonds will mature in 50 years. Compute the current price of the bonds if the percent yield to maturity is a. 5 percent. b. 15 percent. Solution: Present Value of Interest Payments PVA = A × PVIFA (n = 50, i = 5%) Present Value of Interest Payments PVA = A × PVIFA (n = 50, i = 15%)
Exodus Limousine Company has $1,000 par value bonds outstanding at 10 percent interest. The bonds will mature in 50 years. Compute the current price of the bonds if the percent yield to maturity is a. 5 percent. b. 15 percent. Solution: Present Value of Interest Payments PVA = A × PVIFA (n = 50, i = 5%) Present Value of Interest Payments PVA = A × PVIFA (n = 50, i = 15%)
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter10: Long-term Liabilities
Section: Chapter Questions
Problem 10.3E: Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8%...
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Question
Exodus Limousine Company has $1,000 par
- a. 5 percent.
- b. 15 percent.
Solution:
PVA = A × PVIFA (n = 50, i = 5%)
Present Value of Interest Payments
PVA = A × PVIFA (n = 50, i = 15%)
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