Required information Exercise 9-21 (Algo) Calculate the issue price of bonds (LO9-7) [The following information applies to the questions displayed below. On January 1, 2024, Tropical World issues $39.8 million of 8% bonds, due in 15 years, with interest payable semiannuall 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 ridle, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Required information
Exercise 9-21 (Algo) Calculate the issue price of bonds (LO9-7)
[The following information applies to the questions displayed below.]
On January 1, 2024, Tropical World issues $39.8 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 rice, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.
Exercise 9-21 (Algo) Part 3
3-a. If the market rate is 9%, calculate the issue price. (FV of $1. PV of $1. FVA of $1. and PVA of $1)
3-b. Will the bonds issue at face amount, a discount, or a premium?
Complete this question by entering your answers in the tabs below.
Req 3a
Req 3b
If the market rate is 9%, calculate the issue price.(FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate
factor(s) from the tables provided. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as
5,500,000). Round your final answers to the nearest whole dollar.)
Amount
Bond Characteristics
Face amount
Interest payment
Number of periods
Market interest rale
Issue price
$
Req 38
39,800,000
Req 3a
Complete this question by entering your answers in the tabs below.
Req 3b
Will the bonds issue at face amount, a discount, or a premium?
Will the bonds issue at face amount, a discount, or a premium?
<Roq 3a
Req 3b >
Req 3b
Transcribed Image Text:Required information Exercise 9-21 (Algo) Calculate the issue price of bonds (LO9-7) [The following information applies to the questions displayed below.] On January 1, 2024, Tropical World issues $39.8 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 rice, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. Exercise 9-21 (Algo) Part 3 3-a. If the market rate is 9%, calculate the issue price. (FV of $1. PV of $1. FVA of $1. and PVA of $1) 3-b. Will the bonds issue at face amount, a discount, or a premium? Complete this question by entering your answers in the tabs below. Req 3a Req 3b If the market rate is 9%, calculate the issue price.(FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as 5,500,000). Round your final answers to the nearest whole dollar.) Amount Bond Characteristics Face amount Interest payment Number of periods Market interest rale Issue price $ Req 38 39,800,000 Req 3a Complete this question by entering your answers in the tabs below. Req 3b Will the bonds issue at face amount, a discount, or a premium? Will the bonds issue at face amount, a discount, or a premium? <Roq 3a Req 3b > Req 3b
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