Rebecca Gladlyn Is Interested in Purchasing an LMN Bond That

question 5

Essay

Rebecca Gladlyn is interested in purchasing an LMN bond that pays 8% interest each year.The interest will be paid semiannually.How often should Rebecca receive interest?
What amount should she receive?

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Definitions:

Dividend Revenue

Income received from owning shares of stock in a company when it distributes a portion of its earnings to shareholders.

Fair Value

The estimated price at which an asset could be bought or sold in a current transaction between willing parties, other than in a liquidation sale.

Equity Method Investments

Investments in which the investor has significant influence, but not control, over the investee, and the investment is accounted for using the equity method, recognizing the investor's share of the investee's profits and losses.

Cash Dividends

A cash distribution of profits by a corporation to its shareholders.