Bushman, Inc., issues $400,000 of 9% bonds that pay interest semiannually and mature in 10 years....

Bushman, Inc., issues $400,000 of 9% bonds that pay interest semiannually and mature in 10 years. Compute the bond issue price assuming that the bonds' market rate is:

a. 6% per year compounded semiannually.
(Use a calculator or Excel for your calculations. Round your answers to the nearest dollar.)

Present value of principal repayment	$Answer
Present value of interest payments	$Answer
Selling price of bonds	$Answer

b. 8% per year compounded semiannually.
(Use a calculator or Excel for your calculations. Round your answers to the nearest dollar.)

Present value of principal repayment	$Answer
Present value of interest payments	$Answer
Selling price of bonds	$Answer

Expert Solution

for formulas and calculations, refer to the image below -

ekkarill92 answered 2 years ago

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