To finance the construction of an engineering and technology center building, LSU has

decided to issue a total of $10,000$ coupon bonds each with a face value of $$10,000$ with an $8\%$

coupon rate. Bond holders will receive quarterly payments of their bonds with a maturity date of

ten years from the date of issue. LSU plans to enter the market at a time when the interest rate

for such bonds is $7\mathrm{.}186\%.$

a$.$ How much will LSU raise from the bond sale if all the bonds are sold at this interest

rate?

b$.$ After servicing these bonds for six years, LSU will consider buying the remainder of the

bond coupons and their associated face value for a total of $$83,000,000.$ What will be

the effective interest rate they will pay to the bond holders?

c$.$ If you decide to buy $10$ of these bonds when they are issued and plan to hold them for

three years and then sell them for $$12,000$ a piece, what IRR will you attain?