timer Asked: Nov 21st, 2013
account_balance_wallet $5

Question description

The company plans to issue $10 million dollars of $1,000 face value bonds. The bonds pay interest semi-annually at a rate of 8.50% APR and will mature in 10 years. If the current required rate of return on similar debt is 7.75%, how much capital will the company raise in this transaction?

a. $9,501,500.
b. $10,515,300.
c. $9,510,700.
d. $33,883,300.
e. $10,509,000

Tutor Answer

University of Maryland

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