Boorowa Pastoral Ltd plans to raise $2.2 million to purchase land the graze more merino sheep. It will issue bonds with a term to maturity of 10 years. The face value per bond will be $1,000 and the coupon rate will be 7.5% per annum, paid semi-annually. Similar corporate bonds are trading at a yield to maturity of 9% per annum, compounded semi-annually. It is expected that these new bonds will trade at this rate. If the total cost of the bond issue is 3.5%, how many bonds will Boorowa Pastoral need to issue?

Select one:

a. 2,438

b. 2,527

c. 2,526

d. 2,437