Business, 28.07.2021 23:10 perlamaria01
Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 1/4.
A Confirm that the bonds' selling price is approximately correct (within $100). Use the present value tables B.1 and B.3 in Appendix B. (Round all table values to 4 decimal places, and use the rounded table values in calculations. Round your other final answers to the nearest whole dollar amount.)
Per valuex price= Selling price
$240,000117 1/4 $281,400
Cash flowTable value Present Value
$240,000 par (maturity) value
$12,000 interest payment
price of the bond
Difference due to rounding of table values
Answers: 3
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Garcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest paymen...
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