Fox Chapel Company wishes to issue $400,000 of five-year,6% bonds,with interest paid annually at the end of the year.The market rate of interest is currently 5%.What information is needed in order to determine the selling price?

Question

Quizplus · Accepted Answer

To determine the selling price of bonds, the essential information needed includes the face amount of the bonds ($400,000), the stated rate of interest (6%), the market rate of interest (5%), and the bond life (five years). The bond rating and the purpose of the issue are not required for calculating the selling price.

Fox Chapel Company Wishes to Issue $400,000 of Five-Year,6% Bonds,with