Good Buy Inc.plans to sell 30,000 bonds each with a face value of $1,000.If all of the bonds eventually sell for $1,050 each and the firm's investment banker receives a commission of 1.50% for every bond sold,what are the net proceeds to the firm from the sale of the bond issue?

Question

Quizplus · Accepted Answer

The net proceeds can be calculated by first determining the total amount received from selling the bonds at $1,050 each, which is 30,000 bonds * $1,050 = $31,500,000. Then, subtract the investment banker's commission, which is 1.50% of $31,500,000, equal to $472,500. Therefore, the net proceeds are $31,500,000 - $472,500 = $31,027,500.