Problem:
DiPitro's Paint and Wallpaper, Inc., needs to raise $1.19 million to finance plant expansion. In discussions with its investment bank, DiPitro's learns that the bankers recommend a debt issue with gross proceeds of $1,000 per bond and they will charge an underwriter's spread of 7.5 percent of the gross proceeds.
Required:
How many bonds will DiPitro's Paint and Wallpaper need to sell in order to receive the $1.19 million it needs?