Problem:
The MerryWeather Firm wants to raise $19 million to expand its business. To accomplish this, the firm plans to sell 20-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 4 percent.
Required:
Question: What is the minimum number of bonds the firm must sell to raise the $19 million it needs? Use annual compounding.
- 20,816
- 40,030
- 41,631
- 19,000
- 80,060
Note: Please provide reasons to support your answer.