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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Question
14. 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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