A Company Issues 6%, 5 Year Bonds with a Par

question 32

Essay

A company issues 6%, 5 year bonds with a par value of $800,000 and semiannual interest payments. On the issue date, the annual market rate of interest is 8%. Compute the issue (selling) price of the bonds. The following information is taken from present value tables:
Present value of an annuity for 10 periods at 3% 8.5302 Present value of an annuity for 10 periods at 4% 8.1109 Present value of 1 due in 10 periods at 3%................... 0.7441
Present value of 1 due in 10 periods at 4% 0.6756

Recognize the basic principles and elements involved in forming, enforcing, and interpreting contracts.

Differentiate between various types of contracts (bilateral, unilateral, express, implied-in-fact, and quasi-contracts).

Identify the conditions under which a contract may be void, voidable, unenforceable, or illegal.

Understand the rights and obligations of parties in a contract, including remedies available for breach of contract.

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Definitions:

Human Voice

The sound produced by humans using the vocal folds for speaking, singing, laughing, crying, screaming, etc.

Soothing music

Refers to types of music composed to relax, calm, and bring comfort to the listener.

Baby's Sounds

Refers to the noises made by infants, which can include crying, cooing, babbling, and laughing, as part of their early communication skills.

Palm

The inner surface of the hand from the wrist to the base of the fingers or the tropical tree yielding coconuts or dates.