JRJ Corporation recently issued 10-year bonds at a price of $1,000.These bonds pay $60 in interest each six month Their price has remained stable since they were issued, i.e., they still sell for $1,000.Due to additional financing nee the firm wishes to issue new bonds that would have a maturity of 10 years, a par value of $1,000, and pay $40 in interest every six months.If both bonds have the same yield, how many new bonds must JRJ issue to raise $2,000,0 cash?

Question

Quizplus · Accepted Answer

The Answer of JRJ Corporation recently issued 10-year bonds at a price of $1,000.These bonds pay $60 in interest each six month Their price has remained stable since they were issued, i.e., they still sell for $1,000.Due to additional financing nee the firm wishes to issue new bonds that would have a maturity of 10 years, a par value of $1,000, and pay $40 in interest every six months.If both bonds have the same yield, how many new bonds must JRJ issue to raise $2,000,0 cash?

JRJ Corporation Recently Issued 10-Year Bonds at a Price of $1,000.These