How many bonds will they have to issue to raise needed

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XYZ Corp needs to raise $527,000. It has decided to issue a $1000 par value bond with an annual coupon rate of 10.7% with interest paid semiannually and a 15 year maturity. Investors require a rate of return of 8.1%.

a) Compute market value of bond

b) How many bonds will they have to issue to raise the needed funds. What is the firms after-tax cost of debt if firms tax rate is 34%.

Reference no: EM13476479

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