Use excel or financial calculator

A bond has the following features:

• Coupon rate of interest (paid annually): 12 percent
• Principal: $1,000
• Term to maturity: 10 years

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

   -Select-Principal/ All coupon payments

2. If the current rate of interest on comparable debt is 8 percent, what should be the price of this bond? Assume that the bond pays interest annually. Round your answer to the nearest dollar.

   $

   Would you expect the firm to call this bond? Why?

   -Select-Yes/No , since the bond is selling for a -Select-discount/premium.

3. 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 ten years if the funds earn 8 percent annually and there is $120 million outstanding? Round your answer to the nearest dollar.

   $