Moon Software Inc

question 74

Multiple Choice

Moon Software Inc.is planning to issue two types of 25-year,noncallable bonds to raise a total of $6 million,$3 million from each type of bond.First,3,000 bonds with a 10% semiannual coupon will be sold at their $1,000 par value to raise $3,000,000.These are called "par" bonds.Second,Original Issue Discount (OID) bonds,also with a 25-year maturity and a $1,000 par value,will be sold,but these bonds will have a semiannual coupon of only 6.25%.The OID bonds must be offered at below par in order to provide investors with the same effective yield as the par bonds.How many OID bonds must the firm 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:

Significant Main Effect

A statistically significant result in an ANOVA test, indicating a difference in group means across one independent variable.

Crime Area

An identified section or zone within a geographic location known to have higher rates of criminal activities or incidents.

Marginal Means

The average value of a variable across different levels of another variable, often used in the context of factorial designs or ANOVA.

Significant Main Effect

In statistical analysis, a main effect is considered significant if the differences within groups are larger than would be expected by chance alone.