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Selling bonds. Rawlings needs to raise $42,900,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of
Selling bonds. Rawlings needs to raise $42,900,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of 2.2%. The market yield is currently 7.1% on twenty-year zero-coupon bonds. If Rawlings wants to issue a zero-coupon bond, how many bonds will it need to sell to raise the $42,900,000? Assume that the bond is semiannual and issued at a par value of $1,000 How many bonds will Rawlings need to sell to raise the $42,900,000
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