Consider the following information about the an electronics company that is going to issue a new bond to raise the necessary funds for a new semicon- ductor plant. It wants to raise $200m with the bond issue. The current market interest rate for a comparable investment is 3%, while the bond will mature in 3 years and pay a face value of $102.91, with a coupon rate of 2%.

a) Calculate the price at which each individual bond should be sold and the total number of bonds.

b) If there were no coupon payments with this bond, what would be the required face value of the bond to keep the yield-to-maturity constant?

c) Consider instead the possibility of the rm taking out a loan to be repaid over in full over 4 years to raise the same amount. What would be the necessary payment structure? How much would the rm pay in total including repayments and interest?