Q3

To raise $3,500,000 to expand into new markets, a very successful laptop manufacturing company issued bonds in the market with a coupon rate of 6.50%, paying interest every 6 months, and redeemable in 18 years. They established a sinking fund to retire this debt on maturity and made equal deposits into the fund at the end of every halfyear. a. If the fund was earning 3.30% compounded semi-annually, calculate the periodic cost of the debt. E Round to the nearest cent b. Calculate the book value of the debt after 11 years. the debt. Round to the nearest cent b. Calculate the book value of the debt after 11 years. Round to the nearest cent