On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, P4, 000, 12%, 3-year bonds for F 4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year - end. In addition, SALIENT incurred bond issue cost of P213, 388. What is the effective interest rate on the bond issue?
On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, P4, 000, 12%, 3-year bonds for F 4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year - end. In addition, SALIENT incurred bond issue cost of P213, 388. What is the effective interest rate on the bond issue?
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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![On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, P4, 000, 12%, 3-year bonds for F
4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year - end. In
addition, SALIENT incurred bond issue cost of P213, 388. What is the effective interest rate on the bond
issue?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2e54f947-cde5-4753-a409-751eb2b707a3%2F1f2913c7-30c2-4985-afe1-d496034553b5%2Fgcfm0ua_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, P4, 000, 12%, 3-year bonds for F
4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year - end. In
addition, SALIENT incurred bond issue cost of P213, 388. What is the effective interest rate on the bond
issue?
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