How much cash interest will be paid every six months

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Reference no: EM132106185

Problem - Issue Price

Youngblood Enterprises plans to issue $750,000 face value bonds with a stated interest rate of 10%. They will mature in 5 years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12%.

Required: For each market interest rate, answer the following questions. Refer to the tables above for present value factors. Round calculations and answers to the nearest whole dollar.

1. What is the amount due at maturity?

2. How much cash interest will be paid every six months?

3. At what price will the bond be issued?

Reference no: EM132106185

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