MatioRobots Corporation needs a new building to house its manufacturing processes. However, Matio Robots does not have the cash available to purchase the building. On 1/1/2015, they sell $10,000 in 5-year bonds with a stated rate of 7%. Annual interest payments are paid on 12/31. The market price for these bonds on the day they are issued is 113.3554%. The maturity date is 12/31/2019.

1) What benefits are there for MatioRobots Corporation to obtaining financing via a bond issuance, rather than selling equity? Costs?

2) What is the effective interest rate for this bond on the day they are sold?

3) Is this bond sold at a premium or discount? How do you know?

4) Create an amortization table for this bond