Selling bonds. Rawlings needs to raise S42,800,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of 2.7%. The market yield is currently 7.8% on twenty-year zero-coupon bonds. If Rawlings wants to issue a zero-coupon bond, how many bonds will it need to sell to raise the $42,800,000? Assume that the bond is semiannual and issued at a par value of $1,000. How many bonds will Rawlings need to sell to raise the $42,800,000? (Round to the nearest whole number.)
Selling bonds. Rawlings needs to raise S42,800,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of 2.7%. The market yield is currently 7.8% on twenty-year zero-coupon bonds. If Rawlings wants to issue a zero-coupon bond, how many bonds will it need to sell to raise the $42,800,000? Assume that the bond is semiannual and issued at a par value of $1,000. How many bonds will Rawlings need to sell to raise the $42,800,000? (Round to the nearest whole number.)
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
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Transcribed Image Text:Selling bonds. Rawlings needs to raise $42,800,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of
2.7%. The market yield is currently 7.8% on twenty-year zero-coupon bonds. If Rawlings wants to issue a zero-coupon bond, how many bonds will it need to sell to
raise the $42,800,000? Assume that the bond is semiannual and issued at a par value of $1,000.
How many bonds will Rawlings need to sell to raise the $42,800,000?
| (Round to the nearest whole number.)
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