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Homework answers / question archive / The International Publishing Group is raising $10 million by issuing 15-year bonds with a coupon rate of 8
The International Publishing Group is raising $10 million by issuing 15-year
bonds with a coupon rate of 8.5 percent. Coupon payments will be made annually.
Investors buying the bond currently will earn a yield to maturity of 8.5 percent. At what
price will the bonds sell in the marketplace?
When yield to maturity and Coupon rate are equal, then bond is selling at par. So, the bond will sell at $1000 per bond. The complete issue will be sold for $10 million.
