Things Get Messi Enterprises is issuing new bonds for a capital budgeting project. The bonds will have 25.00 year maturities with a coupon rate of 6.50% APR with semi - annual coupon payments (assume a face value of $1,000 on the bond). The current market rate for similar bonds is 5.24% APR. The company hopes to raise $38.00 million with the new issue. Based on the current market rate, what will a new bond sell for?

Things Get Messi Enterprises is issuing new bonds for a capital budgeting project. The bonds will have 25.00 year maturities with a coupon rate of 6.50% APR with semi - annual coupon payments (assume a face value of $1,000 on the bond). The current market rate for similar bonds is 5.24% APR. The company hopes to raise $38.00 million with the new issue. Based on the current market rate, what will a new bond sell for?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 24P

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