Wilderness World (WW) needs to raise $84 million in debt. To issue the debt, WW must pay
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Wilderness World (WW) needs to raise $84 million in debt. To issue the debt, WW must pay its underwriter a fee equal to 3 percent of the total issue. The company estimates that other expenses associated with the issue will total $487,000. If the face value of each bond is $1,000, how many bonds must be issued to net the needed $84 million? Assume that the firm cannot issue a fraction of a bond.
Face ValueFace value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Net proceeds Amount of issue Flotation costs 84000000 Amount of issue x 1 003 ...View the full answer
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