Cosmic Communications Inc

question 89

Multiple Choice

Cosmic Communications 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 coupon 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 costs, 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

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Definitions:

Glyoxisomes

Specialized organelles found in plant cells that contain enzymes for the oxidation of fatty acids, contributing to the conversion of lipids to carbohydrates during germination.

Peroxisome

A small, membrane-bound organelle found in the cytoplasm of eukaryotic cells, involved in processes such as lipid metabolism and the detoxification of harmful substances.

Cotyledons

The primary leaves of a seedling, emerging from the embryo of a seed, important for the initial photosynthesis and nutrient absorption in many plants.

Eudicot

A major group of flowering plants that are characterized by having two seed leaves or cotyledons upon germination.