Excercise No. 1

Hohl Company is planning to expand its facilities by constructing a new building, and installing new machines. In order to complete this project, the company has decided to issue $2,000,000 worth of 20-year 4% callable bonds. On April 1, the company completed all the necessary paperwork, and is now ready to issue the bonds. Fortunately, just as Hohl Company was issuing its bonds, the current market rate dropped to 3.5%. Their financial advisor recommended issuing the bonds at a premium of $142,124 … Continue reading

Excercise No. 2