Question
LBJ Enterprises is issuing new bonds for a capital budgeting project. The bonds will have 20.00 year maturities with a coupon rate of 6.90% APR
LBJ Enterprises is issuing new bonds for a capital budgeting project. The bonds will have 20.00 year maturities with a coupon rate of 6.90% APR with semi-annual coupon payments (assume a face value of $1,000 on the bond).
The current market rate for similar bonds is 9.48% APR. The company hopes to raise $32.00 million with the new issue.
Based on the current market rate, what will one of the new bonds sell for?
Round to: 2 decimal places.
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Fundamentals Of Financial Management
Authors: James C. Van Horne
10th Edition
0138596875, 9780138596873
