Amount received on bond issue
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Clancy Inc. issues $2,000,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 8%. What amount will Clancy receive when it issues the bonds
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Solution Summary
The solution explains how to calculate the amount received on issue of bonds when stated rate on bonds differs from the market interest rate
Solution Preview
The amount received would be the present value of interest and principal discounted at the current market rate. Annual interest is ...
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