Shin Satellite Corp

question 13

Short Answer

Shin Satellite Corp. issues 10,000 debenture bonds with a face value of $26,000 each and a bond interest rate of 18% per year payable semiannually. The bonds have a maturity date of 10 years. If the market interest rate is 14% per year, compounded semiannually, what is the present worth of one bond to a person who wants to purchase it and earn the market rate?

---

Definitions:

General Contract Law

The body of law that governs agreements made between parties, outlining the rights and obligations of each.

Essence

The intrinsic, fundamental nature or most important quality of something.

1933 and 1934 Securities Acts

The 1933 Act regulates the initial sale of securities to the public (initial public offerings), whereas the 1934 Act governs the secondary trading of those securities in the marketplace.

Common Law

A legal system based on precedent and court decisions rather than written laws or statutes.