Company X wants to raise $35 million in order to develop a new vaccine against the Flu. The company will fund this by issuing a 12-year bond, with $1,000 face value, 6.00% coupon rate, semiannual coupon payments, and yield to maturity of 5.00% APR). How many bonds does Company X have to sell to raise this money? (Round up to the nearest integer). 321,271 bonds 32,128 bonds 32,151 bonds 30,620 bonds

Company X wants to raise $35 million in order to develop a new vaccine against the Flu. The company will fund this by issuing a 12-year bond, with $1,000 face value, 6.00% coupon rate, semiannual coupon payments, and yield to maturity of 5.00% APR). How many bonds does Company X have to sell to raise this money? (Round up to the nearest integer). 321,271 bonds 32,128 bonds 32,151 bonds 30,620 bonds

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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JJ. 182.
1. XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issue to raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate. Rounded to the nearest whole number.
A pharmaceutical company will contract a new loan in the sum of $2,000,000 that is secured by machinery and the loan has an interest rate of 6 percent. The company has also issued 4,000 new bond issues with an 8 percent coupon, paid semi-annually, and matures in 10 years. The bonds were sold at par, and incurred floatation costof 2 percent per issue. 1. Calculate the cost of debt and the market value of debt.
Selling bonds. Lunar Vacations needs to raise $6,300,000 for its new project (a golf course on the moon). Astro Investment Bank will sell the bond for a commission of 2.7%. The market yield is currently 7.8% on twenty-year semiannual bonds. If Lunar wants to issue a 5.9% semiannual coupon bond, how many bonds will it need to sell to raise the $6,300,000? Assume that all bonds are issued at a par value of $1,000.
The day before the Federal Reserve Bank increased the Fed Funds rate by 0.25 %, menswear company Hayden Threads raised $100 million by issuing bonds with par value of $100million, an annually paid coupon of 7.5%, and 20 years to maturity. Use this information to answer the following two questions. Use the Fed's rate increase to calculate the elasicity of this bond issue. Answer is -.7503. I need to through steps
use both financial calculator and spreadsheet to show workings. XYZ Inc. issued 20-yr bonds which pay semi-annual coupons of $60 and is currently selling at $1,000. The firm has decided to raise new funds using bond financing with maturity of 10 years, par value of $1,000 and semi-annual coupons of $80. How many new bonds must XYZ Inc. issue to raise a sum of $10,000,000 in case if we assume that both bonds have the same interest rate. Rounded to the nearest whole number.
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Debt Sanction Company's noncallable bonds were issued several years ago and now have 13 years to maturity. These bonds have a 6.5% annual coupon, paid annually, selling at a price of $958.21 per bond with a par value of $1,000. To raise more capital, the company will issue new 20-year bonds with a flotation cost of 6%. If the firm's tax rate is 30%, what is the yield to maturity of the existing bonds and what is the component cost of debt for use in the WACC calculation? YTM of existing bonds: % Cost of debt in WACC calculation: % (Express your answer in % and round to the second decimal place. For example, if your answer is 0.1234, write it as 12.34 and leave out the percentage sign.)
Selling bonds. Lunar Vacations needs to raise $5,600,000 for its new project (a golf course on the moon). Astro Investment Bank will sell the bond for a commission of 2.8%. The market yield is currently 7.9% on twenty-year semiannual bonds. If Lunar wants to issue a 6.4% semiannual coupon bond, how many bonds will it need to sell to raise the $5,600,000? Assume that all bonds are issued at a par value of $1,000. How many bonds will Lunar need to sell to raise the $5,600,000? (Round to the nearest whole number.)
(Cost of debt) Sincere Stationery Corporation needs to raise $500,000 to improve its manufacturing plant. It has decided to issue a $1,000 par value bond with an annual coupon rate of 14 percent and a maturity of 10 years. The investors require a rate of return of 9 percent. a. Compute the market value of the bonds b. What will the net price be if flotation costs are 10.5 percent of the market price? c. How many bonds will the firm have to issue to receive the needed funds? d. What is the firm's after-tax cost of debt if its average tax rate is 25 percent and its marginal tax rate is 21 percent? e. Rework the problem as follows: Assume a coupon rate of 8 percent. f. What effect does changing the coupon rate have on the firm's after-tax cost of capital? Why is there a change? GUD a. If the bond's annual coupon rate is 14%, what is the market value of the bond? (Round to the nearest cent.) b. What will the net price be if flotation costs are 10.5 percent of the market price? (Round to…
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