Question: WonderWorld Widgets WWW needs to raise 75 million in debt

WonderWorld Widgets (WWW) needs to raise $75 million in debt. To issue the debt, WWW must pay its underwriter a fee equal to 3 percent of the issue. The company estimates that other expenses associated with the issue will total $466,000. If the face value of each bond is $1,000, how many bonds must be issued to net the needed $75 million? Assume that the firm cannot issue a fraction of a bond (i.e., half of a bond)—only “whole bonds” can be issued.

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  • CreatedNovember 24, 2014
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