Required information [The following information applies to the questions displayed below.] On January 1, 2024, Water World issues $25.6 million of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche and the "tornado"- a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. f the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Will the bonds issue at face amount, a discount, or a premium?
Required information [The following information applies to the questions displayed below.] On January 1, 2024, Water World issues $25.6 million of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche and the "tornado"- a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. f the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 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
Problem 1PS
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Required information
[The following information applies to the questions displayed below.]
On January 1, 2024, Water World issues $25.6 million of 6% bonds, due in 20 years, with interest payable semiannually on
June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche
and the "tornado"- a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop
through a small tunnel at the bottom.
2-a. If the market rate is 6%, 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?
Complete this question by entering your answers in the tabs below.
Req 2a
Req 2b
If the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Note: Use tables, Excel,
or a financial calculator. 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.)
Bond Characteristics
Amount
Face amount
$
25,600,000
Interest payment
Number of periods
Market interest rate
Issue price
< Req 2a
Req 2b >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F152d606a-19d5-42cc-b16b-d3ab7c31caac%2Fab102cc0-4c50-4d19-a223-29800e988722%2Fb5cj3hc_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
On January 1, 2024, Water World issues $25.6 million of 6% bonds, due in 20 years, with interest payable semiannually on
June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche
and the "tornado"- a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop
through a small tunnel at the bottom.
2-a. If the market rate is 6%, 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?
Complete this question by entering your answers in the tabs below.
Req 2a
Req 2b
If the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Note: Use tables, Excel,
or a financial calculator. 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.)
Bond Characteristics
Amount
Face amount
$
25,600,000
Interest payment
Number of periods
Market interest rate
Issue price
< Req 2a
Req 2b >
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