Question: Coates Company plans to raise $10 million by selling bonds. Investors are currently requiring a return of 5.1% p.a. on bonds of similar companies. How

Coates Company plans to raise $10 million by selling bonds. Investors are currently requiring a return of 5.1% p.a. on bonds of similar companies. How many bonds will Coates company have to sell, if they issue 15-year bonds with annual coupon payments, a face value of $1,000 and a coupon rate of 3.9%?

Step by Step Solution

★★★★★

3.39 Rating (146 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Calculating the number of bonds Coates Company needs to sell Heres how to calculate the number of bo... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

the company issues a 5 year 8 % 1 0 0 , 0 0 0 semiannual bond for 1 0 1 , 0 0 0 which statment is true. the company received 1 0 0 , 0 0 0 $ the company interest payments are 1 6 , 0 0 0 $ the...

List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

Question 1 Lowe Corp has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The firm's tax rate is 40%. Debt: The firm...

Investors are currently requiring a return of 5.1% on bonds of companies that are similar to ABC Inc. in terms of risk. ABC wants to raise $10 million from the bond market. How many bonds will ABC...

PS-QUESTION FOR PART 111 ONLY: Gonzales Food Store Gonzales Food Stores is a family-owned grocery store chain headquartered in El Paso. However, the owner doesn't know much about business. As a...

Gonzales Food Stores, a family-owned grocery store chain headquartered in El Paso, has hired you to make recommendations concerning financing needs for the following two situations. Part I: Initial...

Complete tabs 7.2, 7.5, 7.15, 7.19, and 7.24 in the attached Chapter 7 Excel spreadsheet. Complete tabs 8.1, 8.6, 8.9, 8.11, and 8.26 in the attached Chapter 8 Excel spreadsheet. An EXAMPLE tab is...

Anyone got complete answers to this quiz? 1. 5a_39 In technical analysis, what is a support level for a stock? A. Demand exceeds supply. B. Supply exceeds demand. C. Volume sold equals volume...

i am taking Cooperate finance which is FIN222 can help me to answer.. ? Tutorial 1 Topic 1 Chapter 1 4. What are the main advantages and disadvantages of organising a firm as a corporation? 6. You...

Explain different types of spectral series of the hydrogen atoms. Find a formula for the wavelength of each series.

1.) A concave mirror forms a real image at 17.0 cm from themirror surface along the principal axis. if the correspondingobject is at a distance of 36.0 cm, what is the mirrors focallength? 2.) The...

Calculate expected rate o f return and standard deviation for Alta, Repo, A m F . , and M P F V = $ 2 0 , 0 0 0 , n = 5 , r = 5 % P V = F V ( 1 + r ) n = 2 0 , 0 0 0 ( 4 . 0 5 ) 5 = $ 1 5 , 6 7 0 . 5...

A contractor can buy truck for B3.5 M each or rent them for B4,000 per truck per day. The truck has a salvage value of B500,000 at the end of its useful life of 5 years. The annual maintenance cost...

A company plans to invest $55,000 initially in a piece of equipment which is expected to produce a uniform annual constant dollars net revenue before tax of $15,000 over the next five years. The...

Two bids have been receive to repave a commercial parking lot. Proposal 1 includes new curbs, grading and paving at an initial cost of 250,000. The life of the parking lot surface constructed in this...

A company that manufactures purgable hydrogen sulfide monitors is planning to make deposits such that each one is 5% larger than the preceding one. How large must the first deposit be, at the end of...

"Spotting" refers to: a). An unwanted creation of Dalmatians during a chemical reaction; b). The application of a compound or mixture to a TLC plate using a micro capillary tube; c). The application...

Which of the following is a TRUE statement regarding expenses?Expenses represent future benefit to the company.The critical event for reconding salary expense is the ad -it of cashExpenset will never...

At the end of 2021, Barker Corporations preliminary trial balance indicated a current ratio of 1.2. Management is contemplating paying some of its accounts payable balance before the end of the...

Cleveland Company is a U.S. firm with a U.S. dollar functional currency that manufactures copper-related products. It forecasts that it will sell 5,000 feet of copper tubing to one of its largest...

John Roberts is 55 years old and has been asked to accept early retirement from his company. The company has offered John three alternative compensation packages to induce John to retire: 1. $180,000...

Watch a movie that features a relational transgression that occurs between two or more people. How does it follow the model of forgiveness and reconciliation that was presented in this chapter? Some...

Take a piece of paper and draw three columns on it. In the first column, identify the various sources of stress you have in your life. In the second, indicate whether the stress factor is positive...

Have you ever experienced distress as defined and explained in this chapter? If not, do you know someone who has? Were you or this other person able (at some point) to identify reasons for this...