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Selling bonds.Lunar Vacations needs to raise $6,500,000 for its new project (a golf course on the moon). Astro Investment Bank will sell the bond for
Selling bonds.Lunar Vacations needs to raise
$6,500,000
for its new project (a golf course on the moon). Astro Investment Bank will sell the bond for a commission of
2.9%.
The market yield is currently
7.6%
on twenty-year semiannual bonds. If Lunar wants to issue a
5.7%
semiannual coupon bond, how many bonds will it need to sell to raise the
$6,500,000?
Assume that all bonds are issued at a par value of
$1,000.
Question content area bottom
Part 1
How many bonds will Lunar need to sell to raise the
$6,500,000?
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