The FOB company plans to issue new bonds with a maturity of 7 years and would offer an annual coupon rate of 3% paid quarterly. Given the level of risk of the FOB business and its industry, investors demand an effective annual risk premium of 2.5%.

A Canadian government bond, considered risk-free, with the same maturity and the same coupon rate as the FOB corporate bond, is currently traded at par. The face value of the bond is $1000.

at. Calculate the effective annual yield of the Canadian government bond.

b. Calculate the effective annual yield of the company's bond FOB.

vs. Calculate the price at which the FOB company can expect to issue its bonds.

all the calculation detail are required