A Company Issued 9%, 10-Year Bonds with a Par Value

question 223

Short Answer

A company issued 9%, 10-year bonds with a par value of $100,000. Interest is paid semiannually. The market interest rate on the issue date was 10%, and the issuer received $95,016 cash for the bonds. On the first semiannual interest date, what amount of cash should be paid to the holders of these bonds for interest?

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Definitions:

Precaution

A measure taken in advance to prevent something dangerous, unpleasant, or inconvenient from happening.

Endoscope

A medical instrument consisting of a long, flexible tube with a camera and light attached, used to visualize the interior of a bodily organ or cavity.

Disinfecting

The process of cleaning something, especially with a chemical, in order to destroy bacteria.

Technician

A professional skilled in the practical aspects of a specific field or discipline, often involved in the application of technical procedures or equipment.