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What is the effective interest rate on the bond

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Question - Power Solutions Ltd. issues a $16,500,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid up front, are $1,056,000. The bond sells at par.

Required -

1. How much cash does Power receive when the bond is issued?

2. What is the effective interest rate on the bond?

3. Prepare an amortization table using the effective-interest method of amortization. Complete the first four payments only.

Reference no: EM133154705

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