Ultimate Butter Popcorn issues 7%, 10-year bonds with a face amount of $60,000.

Question

Ultimate Butter Popcorn issues 7%, 10-year bonds with a face amount of $60,000. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually. At what price will the bonds issue? Ultimate Butter Popcorn issues 7%, 10-year bonds with a face amount of $60,000. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually. At what price will the bonds issue? Ultimate Butter Popcorn issues 7%, 10-year bonds with a face amount of $60,000. The market interest rate for bonds of similar risk and maturity is 7%. Interest is paid semiannually. At what price will the bonds issue?

Explanation / Answer

When market interest rate of return and coupon rate (stated rate of interest) is similar than issue price of bonds is equal to face value of amount of bonds

so issue price of bonds = 60000

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