Collins Corp. sells $400,000 of bonds to private investors. The bonds are due in five years, have an 4.1% coupon rate, and interest is paid semiannually. The bonds were sold to yield 6%. What proceeds does Collins receive from the investors

$367,555

Explanation:

The following information can be gotten from the question

Face Value of the bond = $400,000

Coupon rate = 4.1%

Annual Coupon will be calculated as:

= 4.1%*$400,000

= $16,400

Semi-annual Coupon:

= $16400/2

= $8,200

Annual YTM = 6%

Semi-annual YTM = 6%/2 = 3%

Bond Proceed will now be:

= $8,200 × PVIFA(3%, 10) + $400,000 × PVIF(3%, 10)

= $8,200 × (1-(1/1.03)^10)/0.03 + 400,000/1.03^10

Bond Proceed = $367,555

Collins receive $367,555 from the investors

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).