HomeworkLib
Question

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

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

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

0 0
Add a comment
Know the answer?
Add Answer to:
A company wishes to raise $43 million by issuing 12-year semi-annual coupon bonds with face value...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • ABC Ltd is planning to issue 16-year semi-annual coupon bonds with a face value of $1,000...

    ABC Ltd is planning to issue 16-year semi-annual coupon bonds with a face value of $1,000 and a coupon rate of 6.5%. The nominal yield to maturity of potential investors is estimated to be 7.6% per annum. Calculate the required number (expressed as an integer) of semi-annual coupon bonds to be issued if the firm aims to raise $15 million. (3 marks)

  • Your company wants to raise ​$11.0 million by issuing 30​-year zero-coupon bonds. If the yield to...

    Your company wants to raise ​$11.0 million by issuing 30​-year zero-coupon bonds. If the yield to maturity on the bonds will be 6 % ​(annual compounded APR​) ,what total face value amount of bonds must you​ issue? The total face value amount of bonds that you must issue is ​$ (Round to the nearest​ cent.)

  • Your company wants to raise $8.5 million by issuing 20-year zero-coupon bonds. If the yield to...

    Your company wants to raise $8.5 million by issuing 20-year zero-coupon bonds. If the yield to maturity on the bonds will be 9% (annual compounded APR), what total face value amount of bonds must you issue? The total face value amount of bonds that you must issue is s (Round to the nearest cent.)

  • Your company wants to raise $9.5 million by issuing 25-year zero-coupon bonds if the yield to...

    Your company wants to raise $9.5 million by issuing 25-year zero-coupon bonds if the yield to maturity on the bonds will be al compounded APR what to face value amount of bends must you issue? The total face value amount of bonds that you must issue is Round to the nearest cent)

  • P 6-3 (similar to) Question Help Your company wants to raise $11.0 million by issuing 15-year...

    P 6-3 (similar to) Question Help Your company wants to raise $11.0 million by issuing 15-year zero-coupon bonds. If the yield to maturity on the bonds will be 6% (annual compounded APR), what total face value amount of bonds must you issue? The total face value amount of bonds that you must issue is $ (Round to the nearest cent.)

  • Kintel, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a...

    Kintel, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a face value of $1,000. The company’s investment banker states that investors would use an 12.38 percent discount rate to value such bonds. Assume semiannual coupon payments. At what price would these bonds sell in the marketplace? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and Bond price to 2 decimal places, e.g. 15.25) How many bonds would the firm have to issue to...

  • 1-Concordant Inc. wants to raise $50 million by issuing 10-year zero-coupon bonds with a yield to...

    1-Concordant Inc. wants to raise $50 million by issuing 10-year zero-coupon bonds with a yield to maturity (EAR) of 7.6%. What should be the total face value of the bonds (in $ million)? 2- Treasury spot interest rates are as follows: Maturity (years) 1 2 3 4 Spot rate (EAR) 2.1% 2.8% 3% 4.5% What is the price of a risk-free zero-coupon bond with 3 years to maturity and a face value of $1,000 (in $)?

  • Crane, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a...

    Crane, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a face value of $1,000. The company’s investment banker states that investors would use an 9.1 percent discount rate to value such bonds. Assume semiannual coupon payments. At what price would these bonds sell in the marketplace? (Round answer to 2 decimal places, e.g. 15.25) Market rate $ How many bonds would the firm have to issue to raise $1 million? (Round answer to 0...

  • Oriole, INC., Management wants to raise $1 million by issuing six-year zero coupon bonds with a...

    Oriole, INC., Management wants to raise $1 million by issuing six-year zero coupon bonds with a face value of $1,000. The comapn'ys investment banker states that investors would use an 9.0 percent discount rate to value such bonds. Assume semiannual coupon payments. At what price would these bonds sell (Round 2 dec) How many bonds would the firm have to issue to raise $1 million (round to 2 dec)

  • macy's is planning a store expansion by issuing 10-year zero coupon bond that makes semi-annual coupon...

    macy's is planning a store expansion by issuing 10-year zero coupon bond that makes semi-annual coupon payments at a rate of 5.875% with a face value of $1,000. Assuming semi-annual compounding, what will be the price of these bonds, if the appropriate yield to maturity (discount rate) is 14%? PV= ? i/y= ? n=? PMT=? FV=?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT