Question1. On June 30 of the current year, Rural Gas & Electric Co. issued $50,000,000 face value, 9 percent, 10-year bonds payable, with the interest dates of December 31 and June 30. The bonds were issued at the discount, resulting in an effective semi-annual interest rate of 5 percent
a. Calculate the issue price for the one that results in an effective semi-annual interest rate of 5%
b. Make a journal entry to record the issuance of the bonds at the sales price you calculated in part a
c. Describe why the bonds were issued at a discount
Question2. Discuss the merits and demerits of international portfolio diversification?
Question3. How do we deal with flotation costs in relation to cost of capital?
Quetipon4. How weighted average cost of capital employed in financial decision making?