Rosco Corporation issued $60,000,000 in bonds which mature in 5 years. The bonds pay a 10% semiannual coupon. The current market rate for similar bonds is 8%.
a. At what price should this bond offering sell?
b. Create a table showing the amortized premium or discount the first three years of the bonds.
c. How much is the book value of the bonds at the end of the first year (2 payments)?

Question

Quizplus · Accepted Answer

The Answer of Rosco Corporation issued $60,000,000 in bonds which mature in 5 years. The bonds pay a 10% semiannual coupon. The current market rate for similar bonds is 8%.
a. At what price should this bond offering sell?
b. Create a table showing the amortized premium or discount the first three years of the bonds.
c. How much is the book value of the bonds at the end of the first year (2 payments)?

Rosco Corporation Issued $60,000,000 in Bonds Which Mature in 5