Question

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

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Q1)

Number of bonds needed to issue:

= $12,000,000/$943.57

= 12,717.66 bonds or 12,718 bonds

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Q1/Scite Inc., is trying to determine its cost of debt. The firm has a debt issue...
Q1/Scite Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 2 years to maturity that is quoted at 108.6 percent of face value. The issue makes annual payments and has a coupon rate of 8.7 percent annually. What is the firm's pretax cost of debt? (Enter answer in percents.) Q2/Borkshire Castaway has preferred stock outstanding that is currently selling for $52.05 a share and pays a dividend of $3.4 per share. The...
Gugenheim, Inc. offers a 7 percent coupon bond with annual payments. The yield to maturity is...
Gugenheim, Inc. offers a 7 percent coupon bond with annual payments. The yield to maturity is 8.3 percent and the maturity date is 7 years. What is the market price of a $1,000 face value bond? A $1000 face value bond has two years left to maturity, 5.6% coupon rate with annual coupons, and is currently trading at $915. What is the YTM on this bond?
The Juice Co. wants to raise a million dollars by selling some coupon bonds at par....
The Juice Co. wants to raise a million dollars by selling some coupon bonds at par. Comparable bonds in the market have a 6 percent semi-annual coupon, 8 years to maturity, and are selling at 96.9 percent of par. What coupon rate should the Juice Co. set on their bonds? Select one: a. 3.25 percent b. 6.50 percent c. 6.00 percent d. 4.85 percent
Suppose a firm wants to raise $12.7 million by issuing bonds. It plans to issue a...
Suppose a firm wants to raise $12.7 million by issuing bonds. It plans to issue a bond with the following characteristics: Coupon rate: 6% APR Yield to maturity: 7.6% APR Coupons paid out semi-annually Matures 20 years away from today Face Value = $1,000    How many bonds does the firm need to issue? Round to 2nd decimal point.
Kintel, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a...
Kintel, Inc., management wants to raise $1 million by issuing six-year zero coupon bonds with a face value of $1,000. The company’s investment banker states that investors would use an 10.32 percent discount rate to value such bonds. Assume semiannual coupon payments. At what price would these bonds sell in the marketplace? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and Bond price to 2 decimal places, e.g. 15.25) Market rate $ How many bonds would the firm have...
The Dairy Delight wants to raise $1.5 million by selling some coupon bonds at par. Comparable...
The Dairy Delight wants to raise $1.5 million by selling some coupon bonds at par. Comparable bonds in the market have a 4 percent annual coupon, 10 years to maturity, and are selling at 95 percent of par. What coupon rate should The Dairy Delight set on its bonds?
A company wants to raise $600,000 by issuing zero coupon bonds. The bonds have a face...
A company wants to raise $600,000 by issuing zero coupon bonds. The bonds have a face value of $1,000 and will mature in 8 years. The issue price gives potential investors a yield to maturity of 3% p.a. (nominal). Assume comparable-risk coupon bonds normally pay semi-annual coupons Calculate the issue price per bond. (Round your answer to 2 decimal places. Do not include the $ symbol. Do not use comma separators. E.g. 1234.56) Answer    How many bonds should the...
a company wants to raise 30 million dollars to build a new headquarter. It will fund...
a company wants to raise 30 million dollars to build a new headquarter. It will fund this by issuing a 10-year bond with a face value of $1,000 and a coupon rate of 6.3% paid semiannually. the table below shows the yield to maturity for similar 10-year corporate bonds of different ratings. Which of the following is closest to how many more bonds the company would have to sell to raise this money if their bonds received a BBB rating...
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.
The Xylon Firm wants to raise $18 million to expand its business. To accomplish this, the...
The Xylon Firm wants to raise $18 million to expand its business. To accomplish this, the firm plans to sell 10-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 5 percent. What is the minimum number of bonds the firm must sell to raise the $18 million it needs? Use annual compounding.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT