Question
9% 15 year bond with a similar risk profile to companies that have bonds that have yields of 10%. Flotation costs are R95 per bond.
9% 15 year bond with a similar risk profile to companies that have bonds that have yields of 10%. Flotation costs are R95 per bond. Assume par value of R1000. a.) What is the estimated price of each bond? R Blank 1. Fill in the blank, read surrounding text. b.) What are the net proceeds for each bond? R Blank 2. Fill in the blank, read surrounding text. c.) How many bonds should be issued to cover flotation costs and raise the R1 000 000? Blank 3. Fill in the blank, read surrounding text. bonds. d.) If the market is willing to pay R950 for this bond, calculate the yield to maturity of this bond issue based on the market? Blank 4. Fill in the blank, read surrounding text. % e.) How many bonds would the company need to issue using the market price of the bond to raise the R1 000 000? Blank 5. Fill in the blank, read surrounding text. bonds.
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