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Q1/ LibreOffice, Inc. wants to raise $12 million dollars in debt financing. It wants to offer...

Q1/ LibreOffice, Inc. wants to raise $12 million dollars in debt financing. It wants to offer a $1,000 face value, 8.5 percent coupon bond with annual payments and 12 years to maturity. The yield to maturity on similar bonds out in the marketplace is 9.3 percent. How many bonds must the firm issue in order to raise the desired amount of funding?

Q2/ A $1000 face value bond has two years left to maturity, 5.4% coupon rate with annual coupons, and is currently trading at $940. What is the YTM on this bond? Enter answer in percents, accurate to 2 decimal places

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Answer #1

Q1)

Number of bonds needed to issue:

= $12,000,000/$943.57

= 12,717.66 bonds or 12,718 bonds

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