How Much Will It Cost to Purchase Talliru Bonds?
What is the cost of purchasing eight Talliru bonds and the annual interest income?
Considering the bond quotes for Company Talliru Co. Zeus, what will be the final cost and annual interest income if you purchase eight Talliru bonds?
Answer:
The cost of purchasing eight Talliru bonds would be approximately $8,000.00, and the annual interest income will be $608.00.
Explanation:
To calculate the cost, each Talliru bond is priced at 100.05% of its face value, amounting to $1000.05 per bond. Therefore, purchasing eight bonds would total around $8000. Considering the annual interest income, the coupon rate for Talliru bonds is 7.60%, resulting in an annual interest of $76.00 per bond. With eight bonds, the total annual interest income would be $608.00.
None of the provided multiple choice options match the accurate calculations. Thus, the cost of purchasing eight Talliru bonds is approximately $8,000.00, and the annual interest income is $608.00.