On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of $100 million. The bonds mature on December 31, 2048. Interest is payable annually on each December 31, beginningin 2019. Determine the price of the bonds on December 31, 2018, assuming that the market rate of interest forsimilar bonds was 7%.
On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of $100 million. The bonds mature on December 31, 2048. Interest is payable annually on each December 31, beginningin 2019. Determine the price of the bonds on December 31, 2018, assuming that the market rate of interest forsimilar bonds was 7%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2018, Interlink Communications issued 6% stated rate bonds with a face amount of $100 million. The bonds mature on December 31, 2048. Interest is payable annually on each December 31, beginning
in 2019. Determine the price of the bonds on December 31, 2018, assuming that the market rate of interest for
similar bonds was 7%.
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