Question

A certain insurance company wants to raise $34 million in order to build a new headquarters. The company will fund this by issuing 10-year bonds with a face value of $1,000 and a coupon rate of 6.5%, paid semiannually. The table below shows the yield to maturity for similar 10-year corporate bonds of different ratings.

Security	AAA Corporate	AA Corporate	A Corporate	BBB Corporate	BB Corporate
Yield (%)	6.20%	6.40%	6.70%	7.00%	7.50%

How many more bonds would the insurance company have to sell to raise this money if their bonds received an A rating rather than an AA rating? (Round your answer to the nearest integer.)

bonds

Answer 1