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A firm wants to raise $150000. They plan to issue coupon bonds with 7 years maturity, face value of $1000, and a coupon rate of
A firm wants to raise $150000. They plan to issue coupon bonds with 7 years maturity, face value of $1000, and a coupon rate of 7% (annual coupons). The yield on similar securities is 2.5%. How many bonds do they have to sell to fully cover their funding need?
a.
150
b.
117
c.
171
d.
105
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