Youngblood Inc

Finance Aug 17, 2020

Youngblood Inc. plans to issue $500,000 face value bonds with a stated interest rate of 8%. They will mature in ten years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 8%, (b) 6%, and (c) 10%.

Required

For each market interest rate, answer the following questions:

3. At what price will the bond be issued?

Expert Solution

a). Price of the bond = $500,000

b). Price of the bond = $574,387.37

c). Price of the bond = $437,688.95

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