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Question
On January 1, a company issues 8%. 5 year, $300,000 bonds that pay interest semiannually. On the issue date, the annual market rate of interest is 6%. The following information is taken from present value tables:| Present value of an annuity for 10 periods at 3%........ | 8.5302 |
| Present value of an annuity for 10 periods at 4%........ | 8.1109 |
| Present value of 1 due in 10 periods at 3%................ | 0.7441 |
| Present value of 1 due in 10 periods at 4%................ | 0.6756 |
What is the issue (selling) price of the bond?
A. $420,000
B. $402,362
C. $300,010
D. $308,107
E. $325,592
Answer
This answer is hidden. It contains 271 characters.
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