contestada

when the market rate of interest was 11%, christopher corporation issued $100,000 of five-year, 12% bonds that pay interest semiannually. the selling price of this bond issue was a.$100,000. b.$103,769. c.$129,214. d.$130,016.

Respuesta :

ashishdwivedilVT

The Christopher Corporation issued $100,000 of five-year, 12% bonds that pay interest semi-annually at a market rate of interest of 11%. The cost to sell this issue of bonds was Option B $ 103,769 .

What is meant by the phrase "bond issuance"?

Bonds are a popular way for businesses and governments to raise money. When you purchase a bond, you are essentially lending the issuer money. In exchange, they promise to pay you interest on a regular basis and to repay the loan in full on the designated day . (typically twice a year).

Computation the Value of the bond issue

Given

Issue = $ 100,000

Time = 5 years

Interest = 12 %

[tex]Semiannual Interest = 100000*12%/2 \\= $ 6000\\[/tex]

Market Yield = 11%

n = 5*2 = 10

1(11%/2) = 5.50%

Cash flows

Par (Maturity) Value  = 0.58543 *100000 = 58,543

Interest                     =   7.53763 * 6000 =    45,225.78

                    Issue price of the Bond = $ 103,769

Learn more about Bond here

https://brainly.com/question/29351779

# SPJ 1

Otras preguntas