On january 1 2012 central city issued a 20-year serial bond, Ask an Expert

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On January 1, 2012, Central City issued a 20-year serial bond to finance improvements to the water distribution system. A total of $80,000,000 face values of bonds were issued with coupon and maturity rates as follows:

December 31, 2016 3.0% 5,000,000

December 31, 2021 3.5% 5,000,000

December 31, 2026 4.0% 10,000,000

December 31, 2027 4.1% 10,000,000

December 31, 2028 4.2% 10,000,000

December 31, 2029 4.3% 10,000,000

December 31, 2030 4.4% 15,000,000

December 31, 2031 4.5% 15,000,000

Central City received $80,500,000 from the bond issue. Calculate the NIC and TIC interest rates for the bond issue. What would the values be if the bonds before 2026 were 4.2 percent and bonds 5 percent after 2026?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91529055

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