Hopewell Drugstore plans to sell 50,000 bonds each with a face value of $1,000.If all of the bonds eventually sell for $975 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

Net proceeds = (Number of bonds * Face value per bond * Sale price per bond) - (Number of bonds * Face value per bond * Commission rate)= (50,000 * $1,000 * $975) - (50,000 * $1,000 * 1.50%)= $48,750,000 - $750,000= $48,000,000

Hopewell Drugstore Plans to Sell 50,000 Bonds Each with a Face