Grand Energy Corporation (GE) plans to issue bonds to raise $345 million. GEs investment banker will charge
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Grand Energy Corporation (GE) plans to issue bonds to raise $345 million. GE’s investment banker will charge flotation costs equal to 8 percent of the total amount issued. The market value of each bond at issue time will be $1,000. How many bonds must GE sell to net $345 million after flotation costs? Assume that fractions of bonds cannot be issued. Show how much of the total amount issued will consist of flotation costs and how much GE will receive after flotation costs are paid.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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