These bonds are selling at $1000 issue price. This company realizes that to expand their business to the surrounding area of Sioux City,
They need an additional $5,000,000 in long-term debt. They decided to issue 12-year, $1,000 par value bonds (Call it bonds B) that pay only $40 in interest every quarter. Assume also that A and B will provide bondholders with the same yield, how many new bonds must the city issue to raise $5,000,000? (Ignore the day or two difference between the bonds' issue dates and any bond flotation costs.)
Ans : 10806.45 bonds
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