What is the purchase price of the bonds

Assignment Help Other Subject
Reference no: EM131559619

Whole Foods Inc. sold $5,000,000 worth of bonds on January 1, 2016. These bonds are 10 years bonds with a contract rate of interest of 8%. However, the market rate of interest at the time of the sale by underwriters to investors was 14%.  You are to answer the following question regarding this transaction.

1. What is the purchase price of the bonds at the time they were first issued?

2. What would be the total amount of interest paid by Whole Foods Inc. during the entire duration of the bond's outstanding liability?

3. What is the amount of interest expense incurred by Whole Foods Inc. during the entire first year the bond payable was a liability?

4. Suppose the market rate of interest had been only 4%, then what would be the cash proceeds for the bond transaction with this lower market rate of interest?

5. Again assuming a 4% market rate what would be the amount of interest expenses incurred by Whole Foods Inc. during the first year of the bond liability?

Reference no: EM131559619

Questions Cloud

How to cook your favorite three-dish meal : For this assignment, you will use PowerPoint to generate a brief, 10-slide presentation. Your presentation will be about one of the following topics:
What is current value of one share of stock : The Onboard Co. is a new firm in a rapidly growing industry. What is the current value of one share of this stock if the required rate of return is 9.8 percent?
Estimate the probability of the height of a woman : HEIGHTS OF WOMEN The heights of 4000 women who participated in a survey were found to be normally distributed with a mean of 64.5 in. and a standard deviation.
Describe the impact the war of 1812 : Did Madison, Monroe, and John Quincy Adams successfully represent Jefferson's political ideals as he originally intended?
What is the purchase price of the bonds : What would be the total amount of interest paid by Whole Foods Inc. during the entire duration of the bond's outstanding liability
What is the after tax cost of debt the firm debt : What is the after tax cost of debt the firm’s debt? What is the firm’s weighted average cost of capital adjusted for taxes?
What is the probability that the employee is a man : FLEX-TIME Of 320 male and 280 female employees at the home office of Gibraltar Insurance Company, 160 of the men and 190 of the women are on flex-time.
Describe concept associated with managing information system : Critically analyze scholarly research and describe the basic concepts associated with managing information systems related to risks.
What was the average selling price of saratoga group : How many shares of Saratoga Group preferred stock are outstanding? What was the average selling price of Saratoga Group's common stock shares

Reviews

Write a Review

Other Subject Questions & Answers

  Cross-cultural opportunities and conflicts in canada

Short Paper on Cross-cultural Opportunities and Conflicts in Canada.

  Sociology theory questions

Sociology are very fundamental in nature. Role strain and role constraint speak about the duties and responsibilities of the roles of people in society or in a group. A short theory about Darwin and Moths is also answered.

  A book review on unfaithful angels

This review will help the reader understand the social work profession through different concepts giving the glimpse of why the social work profession might have drifted away from its original purpose of serving the poor.

  Disorder paper: schizophrenia

Schizophrenia does not really have just one single cause. It is a possibility that this disorder could be inherited but not all doctors are sure.

  Individual assignment: two models handout and rubric

Individual Assignment : Two Models Handout and Rubric,    This paper will allow you to understand and evaluate two vastly different organizational models and to effectively communicate their differences.

  Developing strategic intent for toyota

The following report includes the description about the organization, its strategies, industry analysis in which it operates and its position in the industry.

  Gasoline powered passenger vehicles

In this study, we examine how gasoline price volatility and income of the consumers impacts consumer's demand for gasoline.

  An aspect of poverty in canada

Economics thesis undergrad 4th year paper to write. it should be about 22 pages in length, literature review, economic analysis and then data or cost benefit analysis.

  Ngn customer satisfaction qos indicator for 3g services

The paper aims to highlight the global trends in countries and regions where 3G has already been introduced and propose an implementation plan to the telecom operators of developing countries.

  Prepare a power point presentation

Prepare the power point presentation for the case: Santa Fe Independent School District

  Information literacy is important in this environment

Information literacy is critically important in this contemporary environment

  Associative property of multiplication

Write a definition for associative property of multiplication.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd