A bond information sheet for a Southwest Airlines (LUV) Bond is presented below. Please use the bond sheet to answer the following questions.

a.What is the coupon payment for this bond (make sure you account for the frequency of payment)?

b. What is the current price of the bond in dollars? Is the bond selling at a discount, premium or par? Explain why.

c. If not considering underwriting fees, how much did Southwest take home from floating this bond?

d. Show and explain whether this bond is currently fairly priced or not (assume today is March 1).

e. Given the information you have on the bond sheet, what is the dirty price of the bond? Assume today is March 1.

SOUTHWEST AIRLS CO

Coupon Rate 2.650 %

Maturity Date 11/05/2020

Symbol LUV4307713

CUSIP 844741BB3

Next Call Date 10/05/2020

Callable Yes

Last Trade Price $101.38

Last Trade Yield 2.332%

Last Trade Date 03/01/2016

US Treasury Yield

Trade History Prospectus

Price/Yield Chart

Price Chart

Yield Chart

31/07/2003

04/20

11/2015 99.00

12/2015 100.00

01/2016 101.00

02/2016 102.00

Credit and Rating Elements

Moody's Rating Baa1 (11/02/2015)

Standard & Poor's Rating BBB (11/02/2015)

Fitch Rating BBB+ (11/03/2015)

TRACE Grade Investment Grade

Default

Bankruptcy N

Insurance

Mortgage Insurer

PreRefunded/

Escrowed

Additional Description Senior Unsecured Note

Put & Redemption Provisions

Call Date 10/05/2020

Call Price $100.00

Call Frequency Continuously

Put Date

Put Price

Put Frequency

Classification Elements

Bond Type US Corporate Debentures

Debt Type

Industry Group Industrial

Industry Sub Group Transportation

SubProduct

Asset CORP

SubProduct

Asset Type Corporate Bond

State

Use of Proceeds

Security Code

Special Characteristics

Medium Term Note N

Issue Elements

*dollar amount in thousands

Offering Date 11/02/2015

Dated Date 11/05/2015

First Coupon Date 05/05/2016

Original Offering* $500,000.00

Amount Outstanding* $500,000.00

Series

Issue Description

Project Name

Payment Frequency SemiAnnual

Day Count 30/360

Form Book Entry

Depository/Registration DTC, Clearstream, Euroclear

Security Level Senior

Collateral Pledge

Capital Purpose

Bond Elements

*dollar amount in thousands

Original Maturity Size* 500,000.00

Amount Outstanding Size* 500,000.00

Yield at Offering 2.67%

Price at Offering $99.91

Coupon Type Fixed

Escrow Type