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    Calculating the issue price for the bonds

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    On January 1st, Cub Company issued 8% stated rate bonds with a face amount of $100 million. The term of the bonds is 20 years and semiannual interest payments are due on June 30th and December 31st. The market rate of interest for similar bond issues was 9%. Calculate the issue price for the bonds.

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    Solution Preview

    Coupon amount=C=1000*8%/2=$40
    Number of coupon ...

    Solution Summary

    Solution describes the steps to calculate the issue price for the bonds in the given case.