Q6

Clements Marshall Ltd plans to raise $ 2 million to build a new onion-processing factory near Devonport in Tasmania. It will issue bonds with a term to maturity of 12 years. The face value per bond will be $1,000 and the coupon rate will be 7% per annum, paid semi-annually. Similar corporate bonds are trading at a yield to maturity of 8% per annum, compounded semi-annually. It is expected that these new bonds will trade at this rate. How many bonds will Clements Marshall need to issue? Select one: a. 2,166 b. 2,165 O c. 2,207 O d. 2,208