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9. A bond has the following features: Coupon rate of interest : 8 percent Principal: $1000 Term to maturity: 10 years a. What will the

9. A bond has the following features: Coupon rate of interest : 8 percent Principal: $1000 Term to maturity: 10 years a. What will the holder receive when the bond matures? b. If the current rate of interest on comparable debt is 12 percent, what should be the price of this bond? Would you expect the firm to call this bond? Why? c. If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for 10 years if the funds earn 9 percent annually and there is $10 million outstanding?

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