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.
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.
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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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.
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