Whipple Corp. just issued 315,000 bonds with a coupon rate of 6.23 percent paid

Question

Whipple Corp. just issued 315,000 bonds with a coupon rate of 6.23 percent paid semiannually that mature in 20 years. The bonds have a YTM of 6.67 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.)

A 20-year, semiannual coupon bond sells for $958.56. The bond has a par value of $1,000 and a yield to maturity of 7.02 percent. What is the bond's coupon rate?

Kasey Corp. has a bond outstanding with a coupon rate of 5.9 percent and semiannual payments. The bond has a yield to maturity of 5.3 percent, a par value of $1,000, and matures in 19 years. What is the quoted price of the bond?

Explanation / Answer

Number of Bonds Issued = 315000, Coupon = 6.23 % payable semi-annually, YTM = 6.67% and Par Value = $ 2000 and maturity = 20 years or 40 half-years.

Let the market value of the bond be Pm

Semi-Annual Coupon = 0.0623 x 2000 x 0.5 = $ 62.3

Therefore, Pm = 62.3 x (1/0.03335) x [1-{1/(1.03335)^(40)}] + 2000 / (1.03335)^(40) = $ 1903.58

Amount Raised = Number of bonds issued x Pm = 315000 x 1903.58 = $ 599627700

NOTE: Please raise separate queries for solutions to the remaining unrelated questions.

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