Hadden Industries Recently Issued 10-Year Bonds at a Price of $1,000

Multiple Choice

Hadden Industries recently issued 10-year bonds at a price of $1,000. These bonds pay $60 in interest each six months. Their price has remained stable since they were issued, that is, they still sell for $1,000. Due to additional financing needs, the firm wishes to issue new bonds that would have a maturity of 10 years, a par value of $1,000, and pay $40 in interest every six months. If both bonds have the same yield, how many new bonds must Hadden issue to raise $2,000,000?

A) 2,481
B) 2,547
C) 2,596
D) 2,682
E) 2,742