Factors that Affect the Bond Issue Price Rivera Inc. is considering the issuance of $500,000 face value, ten-year term bonds. The bonds will pay 10% interest each December 31, The current market rate is 1096, therefore, the bonds will be issued at face value. Required: 1. For each of the following situations, indicate whether you believe the company will receive a premium on the bonds or will issue them at a discount or at face value. a. Interest is paid semiannually instead of annually Face value D. Assume interest is paid annually but that the market rate of interest is 8%; the nominal rate is still 10% Premium 2. For each situation in part (1), prove your statement by determining the issue price of the bonds given the changes in (a) and (b). If required, round all calculations to the nearest dollar. Here are some time value of money factors: Present value of an annuity, n=10, i=8%, PV=6.71008 Present value of an annuity, n=20, i=596, PV=12.46221 Present value of a single amount, n=10, i=8%, PV=0.46319 Present value of a single amount, n-20, 5%, PV=0.37689 Proof: Bond Price 188,445X 40,275 X a