On July 1, 2015, Jason Company issued $1,000 of 5-year bonds at a 4% stated interest...

On July 1, 2015, Jason Company issued $1,000 of 5-year bonds at a 4% stated interest rate. Interests to be paid semiannually. Calculate the issuance price of the bonds if the market rate of interest is 6%. Use the present value tables provided in the book, choose the answer that is the closest to yours.

A. $914.7

B. $831.51

C. $915.75

D. $1,000

Expert Solution

Ans A
	B	C
	Bond Valuation Example
20	Face Value	$ 1,000
21	Stated rate of Interest	4.00%
22	Market Rate of Interest	6.00%
23	Years to Maturity	5.0
24	Payment Frequency	2
25	Value of Bond(Formula)	-PV(C22/C24,C23C24,C21/C24C20,C20)
26	Value of Bond	$ 914.70

ekkarill92 answered 2 years ago

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