Ask Question
BusinessBusiness
3 May, 02:32

Park Corporation issued 10-year bonds with a face value of $10,000,000. The face rate of interest on the bonds was 8%, and Park agreed to make semiannual payments. The market rate of interest at the time the bonds were issued was 6%. How much cash did Park Corporation receive from the issuance of the bonds

+5
Answers (1)
  1. 3 May, 06:05
    0
    Answer: $11,487,747

    Explanation:

    When companies need to raise money, bonds issuance is one way to do it. A bond acts as a loan between an investor and a corporation. The investor comes in agreement to give the corporation a specific amount of money for a specific period of time in exchange for periodic interest payments at designated intervals. The investor's loan is repaid when the loan reaches its maturity date.

    The issue price of a bond is based on the link between the interest rate that the bond pays and the market interest rate being paid on the same date.

    Issue price of bonds = Present value of interest+Present value of maturity

    = (10000000*4%*14.8775) + (10000000*0.5537)

    Issue price of bonds = 11487747

    So answer is $11487747
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Park Corporation issued 10-year bonds with a face value of $10,000,000. The face rate of interest on the bonds was 8%, and Park agreed to ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What are 2 ways you can do your taxes
Answers (2)
A company borrowed $500,000 cash from a bank and used it to purchase $500,000 of new manufacturing equipment. Which of the following items would be increased by the bank loan and equipment purchase transactions? (check all that apply) A.
Answers (1)
What is the meaning of a team? A. group of people who work simultaneously on various projects B. group of people who work together to achieve different goals C. group of people who compete against each other to achieve a common goal D.
Answers (1)
Use the following information for #22 and #23: Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,000. Budgeted cash receipts total $183,000 and budgeted cash disbursements total $188,000.
Answers (1)
Assume that a firm had such serious financial problems that it was about to be liquidated after a bankruptcy.
Answers (1)
New Questions in Business
Identify whether each statement in the following table best illustrates the concept of consumers' surplus, producers' surplus, or neither.
Answers (1)
How many units would have to be sold to yield a target operating income of $26,000, assuming variable costs are $27 per unit, total fixed costs are $2,000, and the unit selling price is $32?
Answers (1)
Zane's leadership style includes delegating tasks to his employees and giving them the freedom to perform the tasks using any strategy they see fit. this demonstrates which of the critical management skills suggested by katz
Answers (1)
Coca-Cola spent $102 million through The Coca-Cola Campaign focusing on water stewardship, healthy and active lifestyles, community recycling, and education. This initiative is an illustration of a CSR program. True or False?
No Answers
Suppose the Board of Directors of The Staten Island Suppliers Co. announces on October 4th that the regular quarterly dividend of 50 cents per share will be payable to the holders of record at the close of business on November 15th 2019.
Answers (1)
Home » Business » Park Corporation issued 10-year bonds with a face value of $10,000,000. The face rate of interest on the bonds was 8%, and Park agreed to make semiannual payments. The market rate of interest at the time the bonds were issued was 6%.
Sign Up Forgot Password?