Question:

Bond issued question?

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Company A is about to issue 10-year bonds that have face value of $100000 and a stated (contract) interest rate of 5%. What is the cash company A will receive when bond is issued?

I am stumped on this one. I changed the numbers so I can work my problem. I just want to know how your suppose to do that math. I know the bond is issued at a discount. But that's all I know and I don't have any further information. Can someone walk me through this? Thanks so much.

Lori

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2 ANSWERS


  1. you have to tell us the discount off the face value its being issued at


  2. I do not think you have supplied us with sufficient information to solve the problem.  At the very least we would need the yield to maturity.
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