Respuesta :
When bonds are redeemed at maturity, they are always redeemed at face value since by then any bond discount or premium would have become zero, plus the last interest payment.
What are bonds?
Bonds are fixed-income securities that reflect loans from investors to borrowers (typically corporate or governmental). A bond can be compared to an agreement outlining the terms of the loan and the associated payments between the lender and borrower. Companies, municipalities, states, and sovereign governments utilize bonds to finance operations and initiatives. Bondholders are the issuer's debtors or creditors.
Bond specifications typically include the terms for variable or fixed interest payments made by the borrower, as well as the end date by which the principle of the loan is expected to be paid to the bond owner.
- Bonds are tradable assets that are securitized versions of corporate debt issued by businesses.
- Since bonds historically paid debtholders a fixed interest rate (coupon), they are referred to as fixed-income instruments.
- Interest rates that fluctuate or float are also rather typical today.
- Interest rates and bond prices are inversely associated; when rates rise, bond prices decline and vice versa.
- Bonds have maturity dates, after which the full principal must be repaid to avoid default.
Cash proceeds = Maturity amount + interest
= $40,000 + ($40,000 x 8% x 1/2) assuming semi-annual interest payments
= $40,000 + $1,600 = $46,000
Cash proceeds = Maturity amount + interest
= $40,000 + ($40,000 x 7%) assuming annual interest Payments
= $40,000 + $2,800 = $42,800
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