On January 1, 2024, Ocean World issues $40.9 million of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 2-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 2-b. Will the bonds issue at face amount, a discount, or a premium?
On January 1, 2024, Ocean World issues $40.9 million of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 2-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 2-b. Will the bonds issue at face amount, a discount, or a premium?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:On January 1, 2024, Ocean World issues $40.9 million of 8% bonds, due in 15 years, with interest payable
semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a
roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.
2-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
2-b. Will the bonds issue at face amount, a discount, or a premium?
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