Fairfield Pharmaceutical Inc. plans to sell 20,000 bonds each with a face value of $1,000
If all of the bonds eventually sell for $950 each and the firm's investment banker receives a commission of 2.00% for every bond sold, what are the net proceeds to the firm from the sale of the bond issue?
A) $19,600,000
B) $19,000,000
C) $18,780,000
D) $18,620,000
Answer: D
Explanation: D) Net proceeds = (P) × (Q) × (1 - commission rate) = $950 × 20,000 × (1 - 0.02) = $18,620,000.
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