Josephs Baseball Bats, Inc. decides to finance an additional plant expansion by borrowing in the bond market. Having learned a lesson from its earlier bond issuance, where the coupon rate was lower than the market rate, they decided to increase the coupon rate they offer.

On March 1, 2023, they issued a $6,000,000 face value, 6% coupon rate, 20-year bond. However, at this time, the 6% coupon they offered is higher than the 5% market rate of interest that bond investors demanded. The bonds mature on February 28, 2043 and pay interest on February 28^th of each year.

1) How much cash did Josephs Baseball Bats receive; that is, what was the bonds price? (Please show calculations).

2) If, on April 1, 2023, the U.S. Federal Reserve increases interest rates, what will likely happen to the price of Josephs bonds in the marketplace? Why will this happen?