Consider the 1.17% Japanese yen bonds due 2014. Assume that these bonds were issued on March 31, 2010 and mature in four years. Assume that the face value of the bond is 30,500 (in millions).

1. If ME pays interest on these bonds annually, how much interest will the company pay each year?

2. What proceeds did ME receive when it issued these bonds?

3. What annual effective interest rate will ME pay on these bonds over the four years to maturity? To answer this question, calculate the rate at which the issuance proceeds received exactly equals the annual interest payments plus the repayment of the face value at maturity.

4. How would your answer to part 3 above differ if ME paid 0.585% interest semiannually instead of 1.17% annually?