Essay
Chinchilla Climbers recently issued bonds with a face value of $12,000,000 and a coupon rate of 6% for 15 years. The market rate of interest is 4%.
A. Compute the market value of the bonds if interest is paid annually.
B. Computer the market value of the bonds if interest is paid semi-annually.
C. Explain the difference in the market value determined in parts A and B.
Correct Answer:
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A. Interest payment = $12,000,000 × 6% =...View Answer
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Correct Answer:
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