Ellesmere Corporation issues 1 million $1 par value bonds. The stated interest rate is 6% per year and the interest is paid twice a year. What is the real interest rate of the bond? ____ A. 6% B.3% C. 12% D. (1+6%/2)2-1 10.What is the present value of $10,000 per year perpetuity at an interest rate of 5%?____ A. $10,000 B. $100,000 C. $200,000 D. None of the above Please provide formula too.

Ellesmere Corporation issues 1 million $1 par value bonds. The stated interest rate is 6% per year and the interest is paid twice a year. What is the real interest rate of the bond? A. 6% B.3% C. 12% D. (1+6%/2)2-1 10.What is the present value of $10,000 per year perpetuity at an interest rate of 5%? A. $10,000 B. $100,000 C. $200,000 D. None of the above Please provide formula too.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 13Q: A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market...

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