A company wishes to raise $43 million by issuing 12-year semi-annual coupon bonds with face value...
A company wishes to raise $43 million by issuing 12-year semi-annual coupon bonds with face value of $1,000 and coupon rate of 6.28 percent. The bonds will have a yield to maturity of 5.70 percent. Determine the minimum number of these bonds the company needs to issue to raise the desired amount of money.
A. 38,597
B. 52,803
C. 40,956
D. 34,575
Homework Answers
Calculating Value of Bond,
Using TVM Calculation,
PV = [FV = 1,000, PMT = 31.40, N = 24, I = 0.057/2]
PV = $1,049.92
Number of Bonds required = 43,000,000/1,049.92
Number of Bonds required = 40,956
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