ABC company is issuing $400,000 of 10%, 5 year bonds when potential bond investors want...
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Accounting
ABC company is issuing $400,000 of 10%, 5 year bonds when potential bond investors want a return of 12%. Interest is payable semiannually.
Calculate:
a) the present value of the principal.
b) the present value of the interest payments.
c) what is the selling price of the bond?
d) did the bond sell at face value, discount, or a premium?
Please, answers in details. Thanks!
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