On January 1, a company issues bonds dated January 1 with a par value of $260,000. The bonds mature in 3 years. The contract rate 59%, and interestis paid semiannually on June 30 and December 31. The market rate is 10%. Using the present value factors below, the issue (selling) price of the bonds is:number ofperiods interest rate(n)=3636Multiple Choice(i)=9.0%4.5%10.0%5.0%$266,602.$59,386.Present Value ofan Annuity(series ofpayments)2.53135.15792.48695.0757Present valueof 1 (singlesum)0.77220.76790.75130.7462

Selling( issue ) price of bond = present value of interest payments + present value of maturity…

Answered: On January 1, a company issues bonds…

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

Problem 1PS

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