Question

The MerryWeather Firm wants to raise $17 million to expand its business. To accomplish this, the...

The MerryWeather Firm wants to raise $17 million to expand its business. To accomplish this, the firm plans to sell 16-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 8 percent. What is the minimum number of bonds the firm must sell to raise the money it needs? Use annual compounding.

Homework Answers

Answer #1

Minimum number of bonds:

= $17,000,000/$291.89

= 58,241.12 bonds or 58,241 bonds

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