Reference no: EM133052273
Questions -
Q1. When the interest payment dates of a bond are May 1 and November 1, and a bond issue is sold on June 1, the amount of cash received by the issuer will be
increased by accrued interest from May 1 to June 1.
decreased by accrued interest from June 1 to November 1.
increased by accrued interest from June 1 to November 1.
decreased by accrued interest from May 1 to June 1.
Q2. Swifty Company issues $25500000, 4%, 5-year bonds dated January 1, 2020 on January 1, 2020. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 3%. What are the proceeds from the bond issue?
ff 1.5% 2.0% 3% 4%
Present value of a single sum for 5 periods 0.92826 0.90573 0.86261 0.82193
Present value of a single sum for 10 periods 0.86167 0.82035 0.74409 0.67556
Present value of an annuity for 5 periods 4.78264 4.71346 4.57971 4.45182
Present value of an annuity for 10 periods 9.22218 8.98259 8.53020 8.11090