Your company plans to issue bonds later in the upcoming year. But with the economic uncertaintyand varied interest rates, it is not clear how much money the company will receive when the bondsare issued. The company is committed to issuing 2,000 bonds, each of which will have a face valueof $1,000, a stated interest rate of 8 percent paid annually, and a period to maturity of 10 years.Required:1. Compute the bond issue proceeds assuming a market interest rate of 8 percent. (Do not rounduntil totaling the bond proceeds, at which point you should round the total bond proceeds tothe nearest thousand dollars.) Also, express the bond issue price as a percentage by comparingthe (rounded) total proceeds to the total face value.2. Compute the bond issue proceeds assuming a market interest rate of 7 percent. (Do not rounduntil totaling the bond proceeds, at which point you should round the total bond proceeds tothe nearest thousand dollars.) Also, express the bond issue price as a percentage by comparingthe (rounded) total proceeds to the total face value.3. Compute the bond issue proceeds assuming a market interest rate of 9 percent. (Do not rounduntil totaling the bond proceeds, at which point you should round the total bond proceeds tothe nearest thousand dollars.) Also, express the bond issue price as a percentage by comparingthe (rounded) total proceeds to the total face value
Your company plans to issue bonds later in the upcoming year. But with the economic uncertainty
and varied interest rates, it is not clear how much money the company will receive when the bonds
are issued. The company is committed to issuing 2,000 bonds, each of which will have a face value
of $1,000, a stated interest rate of 8 percent paid annually, and a period to maturity of 10 years.
Required:
1. Compute the bond issue proceeds assuming a market interest rate of 8 percent. (Do not round
until totaling the bond proceeds, at which point you should round the total bond proceeds to
the nearest thousand dollars.) Also, express the
the (rounded) total proceeds to the total face value.
2. Compute the bond issue proceeds assuming a market interest rate of 7 percent. (Do not round
until totaling the bond proceeds, at which point you should round the total bond proceeds to
the nearest thousand dollars.) Also, express the bond issue price as a percentage by comparing
the (rounded) total proceeds to the total face value.
3. Compute the bond issue proceeds assuming a market interest rate of 9 percent. (Do not round
until totaling the bond proceeds, at which point you should round the total bond proceeds to
the nearest thousand dollars.) Also, express the bond issue price as a percentage by comparing
the (rounded) total proceeds to the total face value
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