Answers ( 2 )

  1. JanGullberg
    0
    2023-01-12T20:23:26+00:00
    Reply

    Eddie Industries Issues $1,500,000 Of 8% Bonds At 105, The Amount Of Cash Received From The Sale Is

    Eddie Industries is on the move with a new bond issuance! This article will provide an analysis of Eddie Industries’ recent bond issuance, what it means for their financial situation, and the implications for investors. We’ll take a closer look at the details of the bond issue, including how many bonds were issued, at what coupon rate, and at what price. Finally, we’ll discuss how much cash was actually received from the sale and how it can be used in Eddie Industries’ operations.

    Eddie Industries issues $1,500,000 of 8% bonds at 105

    Eddie Industries issued $1,500,000 of 8% bonds at 105. The amount of cash received from the sale is $1,575,000. The interest expense for the year will be $120,000.

    The amount of cash received from the sale is

    Assuming that the $1,000,000 face value of the bonds is issued at par, the amount of cash received from the sale is $1,000,000. This cash can be used to finance operations, expand the business, or repay debt.

    The interest expense for the year is

    Assuming Eddie Industries sold all of the bonds at par, the amount of cash received from the sale would be $1,000,000. The interest expense for the year would be $60,000.

    The net income for the year is

    Assuming Eddie Industries issues $1,000,000 of 5% bonds at 97, the amount of cash received from the sale is $970,000. The net income for the year is $30,000. After deducting interest expense of $50,000, Eddie Industries will report net income of $30,000 for the year.

    The cash flow from operating activities for the year is

    Assuming that all the bonds are sold at par, the cash received from the sale would be $100,000. The cash flow from operating activities for the year is would be $9,800. This is calculated by taking the net income for the year of $10,000 and adding back interest expense of $200 and subtracting out dividends paid of $400.

    The cash flow from investing activities for the year is

    The cash flow from investing activities for the year is $54,000. This amount includes the $50,000 received from the sale of the bonds and the $4,000 interest earned on the bonds.

    The cash flow from financing activities for the year is

    The cash flow from financing activities for the year is $,,. This amount was received from the sale of Eddie Industries’ % bonds at par. The proceeds from the bond sale were used to finance the company’s operations and expansion.

    Conclusion

    In conclusion, Eddie Industries issued $1,500,000 of 8% bonds at a price of 105 to generate cash for their operations. After the issuance of these bonds, the company received an amount equal to 1.05 times the face value of the bonds or $1,575,000 in total cash proceeds from this sale. The additional 5% above face value is known as bond premium and represents additional income generated by issuing debt instead of equity financing instruments.

  2. Paterson
    0
    2023-03-06T12:51:50+00:00
    Reply

    It’s a great day here at Eddie Industries! We’re proud to announce that we have just issued $1,500,000 of 8% bonds at 105, resulting in a cash received from the sale of $1,575,000!

    This is an exciting moment for the company and its investors, as the bond sale represents a significant step forward for us. We believe that this bond sale will help to strengthen our financial foundation and provide us with the resources we need to continue to grow and expand our operations.

    We want to thank all of our investors for their support and confidence in our company. Your support is invaluable to us and we are extremely grateful for it.

    We are confident that this bond sale will bring positive results for us in the near future. We look forward to working together with our investors to create a brighter future for Eddie Industries.

    Thank you, and here’s to a successful future!

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