Solved: Your company plans to issue bonds later in the

upcoming

Your company plans to issue bonds later in the upcoming year. But with the economic
uncertainty and varied interest rates, it is not clear how much money the company will receive
when the bonds are issued. The company is committed to issuing 2,000 bonds, each of which
will have a face value of $ 1,000, a stated interest rate of 8 percent paid annually, and a period
to maturity of 10 years.

Required:

1. Compute the bond issue proceeds assuming a market interest rate of 8 percent. (Do not
round until totaling the bond proceeds, at which point you should round the total bond proceeds
to the nearest thousand dollars.) Also, express the bond issue price as a percentage by
comparing the (rounded) total proceeds to the total face value.

2. Compute the bond issue proceeds assuming a market interest rate of 7 percent. (Do not
round until totaling the bond proceeds, at which point you should round the total bond proceeds
to the nearest thousand dollars.) Also, express the bond issue price as a percentage by
comparing the (rounded) total proceeds to the total face value.

3. Compute the bond issue proceeds assuming a market interest rate of 9 percent. (Do not
round until totaling the bond proceeds, at which point you should round the total bond proceeds
to the nearest thousand dollars.) Also, express the bond issue price as a percentage by
comparing the (rounded) total proceeds to the total face value.

Your company plans to issue bonds later in the upcoming

ANSWER
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