In October of fiscal year 2005 Lowes issued 500 million of u

In October of fiscal year 2005, Lowe’s issued $500 million of unsecured notes with a coupon rate of 5% and maturing in October 2015. How much did Lowe’s receive in cash from this issuance?

Solution

Since notes are issued , these are the amount borrowed which repays at face value. However at the initial issue time, amount received will be face value bY Lowe\'s. Only interest will be expense to Lowe\'s.

Lowe\'s receive in cash from issuance = $ 500 million (fave value)