A company issued $500,000 of bonds for $498,351. Interest is paid semiannually. The bond markets and the financial press are likely to report the bond issue price as

Question

Quizplus · Accepted Answer

The bond issue price is always reported as a percentage of the face value. In this case, the face value of the bonds is $500,000, and the issue price is $498,351. Therefore, the issue price as a percentage of face value is (498,351 / 500,000) x 100% = 99.67%. Hence, the likely report by bond markets and the financial press would be 99.67%.

A Company Issued $500,000 of Bonds for $498,351