Explain why the monies raised are either lower or higher

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Question: NBS Inc., makers of scuba diving products is issuing bonds to raise monies to fund an exciting new project. However, you notice that the prospectus does not detail the price of each bond. Calculate the price of each bond, given the following information:

The bonds will mature exactly 3 and a half years after being issued;
Each bond has a face value of $350,000;
The yield on these bonds is 12% per annum.; and,
These bonds will pay coupons semi-annually at a rate of 9% per annum.

From your answer in part b), explain why the monies raised are either lower or higher than the face value of the bond.

Reference no: EM133265204

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