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The day before the Federal Reserve Bank increased the Fed Funds rate by 0.25%, menswear company Hayden Threads raised $100 million by issuing bonds
The day before the Federal Reserve Bank increased the Fed Funds rate by 0.25%, menswear company Hayden Threads raised $100 million by issuing bonds with par value of $100 million, an annually paid coupon of 7.5%, and 20 years to maturity. Use this information to answer the following two questions. 4. Assuming the bond's required rate of return increased the full 0.25%, how much money did the bond's investors gain/lose due to the interest rate change? a. Lost $3,050,555.65 b. Lost $2,500,882.03 c. Gained $2,500,882.03 d. Gained $3,050,555.65
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