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option 1: MV=95.72
in this case, if we issue 150m bonds, we will raise:
150m/100 x 95.72 = $143,580,000
the shortfall will be: 150m-143.58m=$6.42m
in order to raise this shortfall, we will need to issue extra:
6.42m/95.72 = 67071 bonds
My question: the answer is calculating 67398 extra bonds, but he has used the discount of 4.3% (100-95.72) to calculate this figure.
i just want to know if my arithmetic is also acceptable?
regards
Please tell me which exam the question was in (I can’t remember the name of every question 🙂 )
(If it was not an exam question, but it in the BPP Revision Kit, then please give mt eat number of the question).
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