Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Determine the present value of the bonds payable. Round your answer to the nearest dollar.
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Determine the present value of the bonds payable. Round your answer to the nearest dollar.
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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Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
Determine the present
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**Present Value of Bonds Payable; Discount**
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in a Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
[Open Spreadsheet Icon] Open spreadsheet
**Determine the present value of the bonds payable. Round your answer to the nearest dollar.**
$22,729,071 ❌
**Feedback**
"*Check My Work*
Remember, the selling price of a bond is the sum of the present values of: the face amount of the bonds due at the maturity date and the periodic interest to be paid on the bonds.
The market rate of interest is used to compute the present value of both the face amount and the periodic interest."
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In this exercise, learners are tasked with calculating the present value of bonds using a specified market interest rate. The objective is to understand how bonds are valued based on their future cash flows, discounted back to their present value using a market rate. This task integrates spreadsheet skills and finance concepts.
The text highlights key concepts such as bond face value, maturity date, periodic interest, and market interest rate. It emphasizes the importance of accurate calculations and the practical application of theoretical finance concepts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4de5b42-9166-46a0-a6b7-86db31c0fe47%2Feaa41505-e0c0-4d1e-b292-49ad6dfacf79%2Fju2x83c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:---
**Present Value of Bonds Payable; Discount**
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in a Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
[Open Spreadsheet Icon] Open spreadsheet
**Determine the present value of the bonds payable. Round your answer to the nearest dollar.**
$22,729,071 ❌
**Feedback**
"*Check My Work*
Remember, the selling price of a bond is the sum of the present values of: the face amount of the bonds due at the maturity date and the periodic interest to be paid on the bonds.
The market rate of interest is used to compute the present value of both the face amount and the periodic interest."
---
In this exercise, learners are tasked with calculating the present value of bonds using a specified market interest rate. The objective is to understand how bonds are valued based on their future cash flows, discounted back to their present value using a market rate. This task integrates spreadsheet skills and finance concepts.
The text highlights key concepts such as bond face value, maturity date, periodic interest, and market interest rate. It emphasizes the importance of accurate calculations and the practical application of theoretical finance concepts.
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