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xenn [34]
2 years ago
13

RAK Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 5.7 percent coupon b

onds on the market that sell for $1,048, have a par value of $1,000, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par
Business
1 answer:
Hatshy [7]2 years ago
7 0

Answer:

5.31%

Explanation:

FV = 1000

Coupon rate = 5.7%

No of compound = 2

Interest per period = $28.5

Bond price = $1048

No of years to maturity = 20

No of compounding till maturity = 40

Coupon rate set on new bonds = Rate(Nper, PMT, -PV, FV) * 2

Coupon rate set on new bonds = Rate(40, 28.5, -1048, 1000) * 2

Coupon rate set on new bonds = 0.02655 * 2

Coupon rate set on new bonds = 0.0531

Coupon rate set on new bonds = 5.31%

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Hope this helps!

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2 years ago
A sales manager at SFB Industries would like to import leads from a recent event. To ensure efficiency, she would like these to
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3 years ago
It is rumored that the Illinois Operations Manager, Sam, has requested the quarterly budget to include an available position for
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7 0
3 years ago
ecord adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made
k0ka [10]

Answer: Please Refer to Explanation

Explanation:

Please see complete question attached to this answer.

A.

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CR Salary Payable $18,500

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B.

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3 years ago
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