Question: Rawlings needs to raise 40 000 000 for its new manufacturing plant
Rawlings needs to raise $40,000,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of 2.5%. The market is currently yielding 7.5% 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 $40,000,000?
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