Question

Company X is issuing bonds.  They plan to issue 10,000,  $1000 par, 7% bonds that pay semi-annual for 5 years.
What are the proceeds from this bond sale if the market rate is 6%?

Answer 1

Year	Cashflow	PV Factor @ 3%semi annual	Discounted Cash Flow
1	35	0.9709	33.98
2	35	0.9426	32.99
3	35	0.9151	32.03
4	35	0.8885	31.10
5	35	0.8626	30.19
6	35	0.8375	29.31
7	35	0.8131	28.46
8	35	0.7894	27.63
9	35	0.7664	26.82
10	1035	0.7441	770.14
Present Value of the Bond	1,043
No of Bonds Issued	10000
Proceeds from Bond Sale (in $)	1,04,26,510