Question

Cosmic Communication Inc. is planning two new issues of 25-year bonds. Bond par will be sold at its $1,000 par value, and it will have a 10% semiannual coupon. Bond OID will be an Original issue Discount bond, and it will also have a 25-year maturity and a $1,000 par value, but its semiannual will be only 6.25%. If both bonds are to provide investors with the same effective yield, how many of the OID bonds must Cosmic issue to raise$3,000,000? Disregard flotation cost, and round your final answer up to a whole number of bonds.

a. 4,228
b. 4,337
c. 4,448
d. 4,562
e. 4,676

Answer 1

d. 4562

Answer 2

what is the xcel solution