20. If\' a bond is issued at par value, the carrying value of the bond wil: A Re

Question

20. If' a bond is issued at par value, the carrying value of the bond wil: A Remain the same over the life of the bond B. Increase over the life of the bond C. Decrease over the life of the bond D. Not enough information 21. Ordinarily, the proceeds from the sale of a bond issue will be equal to: A. The face value of the bond B. The total of the face value plus all interest payments C. The face value of the bond plus the present value of the stream of interest payments D, The present value of the face value plus the present value of the stream of interest payments 22. Johnson will receive $450,000 from his trust fund in 20 years from today. He assumes he could get a return of 6% on his own until then. How much is his trust fund payment worth in today's dollars? A. $137,952 . $140,310 $450,000 $5,161,464

Explanation / Answer

If the Bonds is issued at par value,

Market value of the bonds is depend on the coupon rate of the bond and market rate of interest. If the market rate of interest is more than a bonds coupon rate than the bonds will trade at less than there oar value and vice-versa.

So, We cannot determine the bonds price with this information.

Answer = Option D = Not Enogh information.

Note: As per chegg answering guideines we have to answer first question in multiple question.

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