Recently, the government of Ghana raise GHC 400 million by selling a 3 year bond with a face value of GHC 1,000 each at an annual coupon rate of 16%pa payable semi-annually. Company X also wishes to raise GHC 100million by selling a 3 year bond. However, the financial markets are demanding a risk premium of 2% in order to buy the bonds of Copany X.

How much are investors willing to pay for each of the bond?

How many bonds must Company X sell to raise the amount needed if it needs to pay an issue cost of GHC 50 per bond?