Determine the Price of a $500,000 Bond Issue Under Each

question 83

Essay

Determine the price of a $500,000 bond issue under each of the following independent assumptions:
$$\begin{array} { l l c c } \text { Maturity } & \text { Interest Paid } & \text { Stated Rate } & \text { Effective Rate } \\\text { 1. 10 years } & \text { annually } & 10 \% & 12 \% \\\text { 2. 10 years } & \text { semiannually } & 10 \% & 12 \% \\\text { 3. 10 years } & \text { semiannually } & 12 \% & 10 \%\end{array}$$

Calculate external financing needs based on sales growth, capacity utilization, and dividend payout ratios.

Determine the addition to retained earnings and total assets under specific growth conditions.

Analyze the relationship between sales growth, capacity utilization, dividend policy, and the need for additional financing.

Calculate the pro forma financial figures given a set growth rate and specific financial ratios.

---

Definitions:

Idiom

A phrase or expression whose meaning cannot be understood from the literal definition of its words, but carries a figurative sense.

Recite

To verbally repeat or deliver words from memory, often in a formal setting.

Sweetened

means making an offer or deal more attractive by adding benefits or incentives to encourage acceptance.

Active Voice

A sentence structure where the subject performs the action expressed by the verb, resulting in clear and direct expressions.