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How many new bonds must lowell issue to raise cash

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Problem 1: ABC Corporation recently issued 10-year bonds at a price of $1,000 with a 8 percent semi-annual coupon at par. Now it wishes to issue new 10 year bonds with 4 percent semi-annual coupon with a face value of $1,000. If both bonds have the same yield-to-maturity, how many new bonds must Lowell issue to raise $1,000,000 cash?

Option 1: 1,373
Option 2: 4,382
Option 3: 1,688
Option 4: 1,515

Reference no: EM132856771

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