BC Brewery Issues $120 Million in Straight Bonds at an Original

question 25

Multiple Choice

BC Brewery issues $120 million in straight bonds at an original issue discount of 1.5% and a coupon rate of 5%.The firm also pays underwriting fees of 3% on the face value of the bonds.What are the net proceeds to BC Brewery from the bond issue?

• A)$114.6 million
• B)$118.2 million
• C)$116.4 million
• D)$108.6 million
• E)$110.4 million

---

Definitions:

Safety Needs

According to Maslow, the second level of human needs, emphasizing personal security, health, and well-being.

Need For Power

A psychological drive that reflects an individual's desire to control or influence others.

Muscle Cars

A term used to describe high-performance automobiles, typically American-made, with powerful engines designed for maximum acceleration and speed.

Biogenic Needs

Basic, physiological needs required for human survival, such as food, water, air, and shelter.