Find how many coupon bonds would have to be issued

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Justin Ltd is planning to issue 15-year bonds with a face value of $1000. The going market rate for such bonds is 3.25 per cent. Assume that coupon payments will be semiannual. The company is trying to decide between issuing an 6 per cent coupon bond or a zero coupon bond. The company needs to raise $1 million.

Question 1: What will be the price of the 6 per cent coupon bonds?

Question 2: How many coupon bonds would have to be issued?

Question 3: What will be the price of the zero coupon bonds?

Question 4: How many zero coupon bonds will have to be issued?

Reference no: EM132995668

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