Answered

At Westonci.ca, we connect you with experts who provide detailed answers to your most pressing questions. Start exploring now! Our Q&A platform offers a seamless experience for finding reliable answers from experts in various disciplines. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Grand Energy Corporation (GE) plans to issue bonds to raise $190 million. GE's investment banker will charge 5 percent of the total amount issued to help raise the funds. The market value of each bond at issue time will be $1,000. How many bonds must GE sell to net $190 million after flotation costs? Assume that fractions of bonds cannot be issued. Round your answer to the nearest whole number.

Sagot :

abiolataiwo2015

The number of bonds that GE must sell to net $190 million after flotation costs is 200,000 bonds.

Number of bonds

First step is to calculate the amount issue

Net proceeds = Amount of issue x (1 - Flotation costs)

$190,000,000 = Amount of issue x (1 - 0.05)

Amount of issue = $190,000,000/0.95

Amount of issue= $200,000,000

Second step is to calculate number of bonds

Number of bonds = $200,000,000/$1,000

Number of bonds= 200,000 bonds

Inconclusion the number of bonds that GE must sell to net $190 million after flotation costs is 200,000 bonds.

Learn more about bonds here:https://brainly.com/question/25596583

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.