P Brief Exercise G-13 Dempsey Railroad Co. is about to issue $314,000 of 8-year
ID: 2579924 • Letter: P
Question
P
Brief Exercise G-13
Dempsey Railroad Co. is about to issue $314,000 of 8-year bonds paying an 12% interest rate, with interest payable semiannually. The discount rate for such securities is 10%.
How much can Dempsey expect to receive for the sale of these bonds?
Please explain step by step so that I can undertsand how to do it.
Thank you
i Safari File Edit View History Bookmarks Develop Window Help ) 100% Sun 9:07 AM E edugen.wileyplus.com WileyPLUS Chegg Study Guided Solutions and Study Help | Chegg.com Weygandt, Financial & Managerial Accounting, 2e PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Brief Exercise G-13 52 PM Your answer is incorrect. Try again. Dempsey Railroad Co. is about to issue $314,000 of 8-year bonds paying an 12% interest rate, with interest payable semiannually. The discount rate for such securities is 10%. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) How much can Dempsey expect to receive for the sale of these bonds? (Round answer to 0 decimal places, e.g. 2,525.) Dempsey can expect to receive Exercise 10-16 342710.59 Revie Review Results by Study Objective SHOW ANSWER LINK TO TEXT Question Attempts: Unlimited SAVE FOR LATER SUBMIT ANSWER 26Explanation / Answer
Principal 314,000 interest (314,000*12%*1/2)= 18840 Bond issue price where n = 5.00% t= 16 principal 314,000*.45811 143847 (use PV of $1 table at 5% for 16 years) interest 18,840*10.83777= 204184 (use PV of ordinary annuity table at 5% for 16 years) total bond issue price 348030 Dempsey can expect to receive 348,030
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.