A bond has the following features:

Coupon rate of interest $($paid annually$)$: $4$ percent

Principal: $$1,000$

Term to maturity: $12$ years

What will the holder receive when the bond matures?

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If the current rate of interest on comparable debt is $7$ percent, what should be the price of this bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

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Would you expect the firm to call this bond? Why?

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$,$ since the bond is selling for a

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$.$

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 twelve years if the funds earn $7$ percent annually and there is $$120$ million outstanding? Use Appendix C to answer the question. Round your answer to the nearest dollar.

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