Stanthorpe Apples Ltd plans to raise $4 million to purchase land and plant a new apple orchard. It will issue bonds with a term to maturity of 10 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 9% per annum, compounded semi-annually. It is expected that these new bonds will trade at this rate. The cost of the bond issue is 2.5%. How many bonds will Stanthorpe Apples need to issue?

Select one:

a.4,713

b.4,717

c.4,714

d.4,716