In: Finance
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.)
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