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King Leopold Prawn Farming Ltd plans to raise $3 million to build a new prawn farm...

King Leopold Prawn Farming Ltd plans to raise $3 million to build a new prawn farm near Broome in Western Australia. It will issue bonds with a term to maturity of 15 years. The face value per bond will be $1,000 and the coupon rate will be 8% per annum, paid semi-annually. Similar corporate bonds are trading at a yield to maturity of 10% per annum, compounded semi-annually. It is expected that these new bonds will trade at this rate. How many bonds will the company need to issue?

a. 3,545

b. 3,544

c. 3,598

d. 3,597

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