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» Bond problems

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Feb 13, 2007, 03:00 PM

sb1664

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Join Date: Feb 2007

Posts: 1

Bond problems

Here is the problem i cant figure out how to get to the answer...

enviro company issues a 8%, 10 year bond with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2% the straight line method is used to allocate interest expense?

What is the issuers cash proceeds from the issuance of these bonds?

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