Whipple Corp. just issued 325,000 bonds with a coupon rate of 6.29 percent paid semiannually that...

Whipple Corp. just issued 325,000 bonds with a coupon rate of 6.29 percent paid semiannually that mature in 30 years. The bonds have a YTM of 6.73 percent and have a par value of $2,000. How much money was raised from the sale of the bonds? (Round your intermediate calculations to two decimal places and final answer to the nearest whole dollar amount.)

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Expert Solution

We first need to compute the price of bond.

M = $2000, n = 30 * 2 = 60 semi-annual periods, i = 6.73%/2 = 3.365% (semi-annually), C = $62.90 (semi-annually)

P = $1,612.64 + $274.55

P = $1,887.19

So, amount raised = $1,887.19 * 325,000 = $613,337,366

jeff jeffy answered 1 year ago

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