Question Details

(Solution) - Factors that Affect the Bond Issue Price Rivera Inc is

Brief item decscription

Solution download


Item details:

Factors that Affect the Bond Issue Price Rivera Inc. is considering the issuance of $500,000 face value, ten-year term bonds. The bonds will pay 5% interest each December 31. The current market rate is 5%; therefore, the bonds will be issued at face value.

Required
1. For each of the following situations, indicate whether you believe the company will receive a premium on the bonds or will issue them at a discount or at face value. Without using numbers, explain your position.
a. Interest is paid semiannually instead of annually.
b. Assume instead that the market rate of interest is 4%; the nominal rate is still 5%.
2. For each situation in (1), prove your statement by determining the issue price of the bonds given the changes in (a) and (b).

 







About this question:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Jul 11, 2017

PRICE: $15

Solution~000523523689.zip (18.37 KB)

Buy this answer for only: $15

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.
SiteLock

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now