Asked by
gurpreet singh
on Oct 28, 2024
Verified
Calculate the issuance price if the market rate of interest was 10%.
A) $5,427,000.
B) $4,477,000.
C) $4,435,000.
D) $5,000,000.
Present Value Factors
The factors used in calculating the present value of a sum of money or a stream of cash flows given a specified rate of return.
Market Rate
The prevailing interest rate available in the marketplace for loans or the return on investment securities, varying based on macroeconomic conditions.
Issuance Price
The price at which a company's shares are offered for sale to the public for the first time in an initial public offering (IPO) or the sale price in subsequent offerings.
- Acquire knowledge about the elementary ideas and numerical operations pertinent to the costs of issuing bonds and the influence of market rates on them.
Verified Answer
MF
Learning Objectives
- Acquire knowledge about the elementary ideas and numerical operations pertinent to the costs of issuing bonds and the influence of market rates on them.