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Rawlings needs to raise $44,200,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank...

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Finance

Rawlings needs to raise $44,200,000 for its new manufacturing plant in Jamaica. Berkman Investment Bank will sell the bond for a commission of 2.5%.

The market yield is currently 7.5% on twenty-year zero-coupon bonds. If Rawlings wants to issue a zero-coupon bond, how many bonds will it need to sell to raise the $44,200,000?

Assume that the bond is semiannual and issued at a par value of $1,000.

How many bonds will Rawlings need to sell to raise the 44,200,000?

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