Lunar Vacations needs to raise $5,800,000 for its new project (a golf course on the moon). Astro Investment Bank will sell the bond for a commission of 2.4%. The market yield is currently 7.4% 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 $5,800,000? Assume that all bonds are issued at a par value of $1,000.

Lunar Vacations needs to raise $5,800,000 for its new project (a golf course on the moon). Astro Investment Bank will sell the bond for a commission of 2.4%. The market yield is currently 7.4% 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 $5,800,000? Assume that all bonds are issued at a par value of $1,000.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 17P

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