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lindseyklewis1p56uvi
28.01.2020 •
Business
Whiteside corporation issues $500,000 of 9% bonds, due in 10 years, with interest payable semiannually. at the time of issue, the market rate for such bonds is 10%.
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Ответ:
$468,844 approx.
Explanation:
Assumption: Since the question is incomplete, with the available information it has been construed that calculation of bond price is required and the question has been solved accordingly.
The price of a bond is the present value of future cash receipts it generates to the investor in the form of interest stream and principal stream.
wherein,
i = annual coupon payments
ytm= investor's expectation of interest or market rate of interest on similar bonds
RV = Redemption value of such bonds assumed to be the face value
n = term to maturity
This is the present value of the bond which is lower than it's face value because market rate of return of similar bonds is higher than the coupon rate of payment by Westside Corporation.
Ответ:
hope it helps
Explanation: