The coupon rate of interest: 5 percent

Principal: $1,000

Term to maturity: 10 years

A. What will the holder receive when the bond matures?

B. If the current rate of interest on comparable debt is 8 percent, what should be the price of this bond? Would you expect the firm to call this bond? Why?

For B please explain why the firm should or shouldn't call the bond is it because its below Par? Because the Coupon is lower? does it matter if each is at a face value of 1000?

1. If the bond has a sinking fund that requires the firm to set aside annually with a trustee sufficient funds to retire the entire issue at maturity, how much must the firm remit each year for 10 years if the funds earn 8 percent annually and there is $100 million outstanding?