What would you pay for a $175,000 debenture bond that matures in 15 years and pays $8,750 a year in interest if you wanted to earn a yield of: Click here to view factor tables
What would you pay for a $175,000 debenture bond that matures in 15 years and pays $8,750 a year in interest if you wanted to earn a yield of: Click here to view factor tables
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![3%? *(Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)*
**Amount to Pay**
$ [Input box]
**eTextbook and Media**
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✖ **Your answer is incorrect.**
4%? *(Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)*
**Amount to Pay**
$ [Input box]
---
This image appears to be part of an online educational tool that requires students to calculate and input values for percentages. The task involves rounding factor values to five decimal places and the final answer to zero decimal places, illustrated by the examples provided. The phrase "Your answer is incorrect" indicates that a previous input was evaluated and found to be wrong.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5e3cc97e-a77f-4ac5-9e71-fb8b01208b37%2F4f198650-720b-48ef-be36-a58979614569%2F0iudxus_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3%? *(Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)*
**Amount to Pay**
$ [Input box]
**eTextbook and Media**
---
✖ **Your answer is incorrect.**
4%? *(Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)*
**Amount to Pay**
$ [Input box]
---
This image appears to be part of an online educational tool that requires students to calculate and input values for percentages. The task involves rounding factor values to five decimal places and the final answer to zero decimal places, illustrated by the examples provided. The phrase "Your answer is incorrect" indicates that a previous input was evaluated and found to be wrong.
![**Problem Statement:**
What would you pay for a $175,000 debenture bond that matures in 15 years and pays $8,750 a year in interest if you wanted to earn a yield of:
[Click here to view factor tables]
**Explanation (without diagrams and graphs):**
This problem involves determining the present value of a debenture bond. A debenture is a type of debt instrument that is not secured by physical assets or collateral. It is backed only by the general creditworthiness and reputation of the issuer.
To find out what you would pay for the bond, you need to calculate its present value, accounting for the annual interest payments and the desired yield. Present value tables (or factor tables) can assist in this calculation by providing factors for different interest rates and time periods.
By clicking the link to view factor tables, you would be able to find the appropriate factors to use based on the desired yield, which will help determine the maximum price you should pay to achieve your yield goal.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5e3cc97e-a77f-4ac5-9e71-fb8b01208b37%2F4f198650-720b-48ef-be36-a58979614569%2Fzd5j6sj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Problem Statement:**
What would you pay for a $175,000 debenture bond that matures in 15 years and pays $8,750 a year in interest if you wanted to earn a yield of:
[Click here to view factor tables]
**Explanation (without diagrams and graphs):**
This problem involves determining the present value of a debenture bond. A debenture is a type of debt instrument that is not secured by physical assets or collateral. It is backed only by the general creditworthiness and reputation of the issuer.
To find out what you would pay for the bond, you need to calculate its present value, accounting for the annual interest payments and the desired yield. Present value tables (or factor tables) can assist in this calculation by providing factors for different interest rates and time periods.
By clicking the link to view factor tables, you would be able to find the appropriate factors to use based on the desired yield, which will help determine the maximum price you should pay to achieve your yield goal.
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