Davis Company is about to issue $600,000 of 8-year bonds paying 12% interest rat

Question

Davis Company is about to issue $600,000 of 8-year bonds paying 12% interest rate with interest payable semiannually. The discount rate of such securities is 10%.

To the closest dollar, how much can Davis expect to receive for the of these bonds?

A. $638,678

B. $458,742

C. $665,026

D. $1,080,000

8 Periods 10% 16 Periods 5% 8 Periods 12% 16 Periods 6% Present Value of 1 0.46651 0.45811 0.40388 0.39365 Future Value of 1 2.14359 2.18387 2.47596 2.54035 Present Value of an annuity of 1 5.33493 10.83777 4.69764 10.105900 Future Value of an annuity of 1 11.43589 23.65749 12.29969 15.627253

Explanation / Answer

Answer : Answer 'C' is correct. that is $ 665026.

Answer P 600000 Coupan interest 600000*6% 36000 Semiannually Period 8 years PV = 36000(PVIFA5%,16)+600000(PVIF 5%,16) 36000*10.83777+600000*0.45811 = $ 665026

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