Bond issue on the future cash flows generated by eaton

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Reference no: EM131318254

Eaton Corporation needs to raise $5.5 million for expansion and it expects that five-year 4% coupon bonds can be sold at a price of $960 for each $1,000 bond.

a) How many of $1000 par value bonds would Eaton have to sell to raise the needed $5.5 million?

b) What will be the burden of this bond issue on the future cash flows generated by Eaton?

Reference no: EM131318254

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