Wildhorse Corporation issues $560,000 of 9% bonds, due in 9 years, with interest payable semiannually. At...

Wildhorse Corporation issues $560,000 of 9% bonds, due in 9 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Issue price of the bonds

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Face Amount		$ 560,000
Interest Payment	5600009%1/2	$ 25,200
Market Rate per period	10/2	5.0%
Period	9*2	18
Issue Price		$ 527,269
		=-PV(C5,C6,C4,C3)
OR
Present value of principal repayment	25200*11.68959	$ 294,578
Present value of interest payments	560000*0.41552	$ 232,692
Issue Price		$ 527,270

ekkarill92 answered 3 years ago

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