Calculating the disregard flotation costs, Finance Basics

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Calculating the disregard flotation costs

Cosmic Communications Inc. is planning two new issues of 25-year bonds. Bond Par will be sold at its $1,000 par value, and it will have a 10% semiannual coupon. Bond OID will be an Original Issue Discount bond, and it will also have a 25-year maturity and a $1,000 par value, but its semiannual coupon will be only 6.25%. If both bonds are to provide investors with the same effective yield, how many of the OID bonds must Cosmic issue to raise $3,000,000? Disregard flotation costs, and round your final answer up to a whole number of bonds.

a. 4,228

b. 4,337

c. 4,448

d. 4,562

e. 4,676

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Finance Basics: Calculating the disregard flotation costs

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Finance Basics: Calculating the disregard flotation costs

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Recent Questions Asked Finance Basics

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Finance Basics: Calculating the disregard flotation costs

Reference No:- TGS055100

Recent Questions Asked Finance Basics

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