What are the implications of the calculations and why are the market value and the actual proceeds from the bond issue different.

Part 3 - Debt Financing (Due at the end of Unit 5) Instructions: Compute the total amount of Bond financing needed for the expansion project. Bonds may only be issued in Face amounts of $1,000. The Bond will pay semiannually with an annual Coupon rate of 5.5%. The Market rate is 4%. Discuss your observations of the results. Please refer to the Project Requirements for complete instructions. $ Purple cells require a formula Yellow cells only require data. Per Bond information Face Number of Bonds issued Coupon Annual Coupon Payment per bond Market Term (years) 1,000 46,400 5.5% 55 4.0% 30 $ $ a. How much total Bond financing needed? b. At what price will the bonds trade after the initial issue? c. What are the company's total annual interest payments? d. What is the total market value of the bonds? 46,400,000 Note - this comes from Part 2 of the Project $1,260.71 2,552,000 58,496,789 $ Part 3 - Debt Financing (Due at the end of Unit 5) Instructions: Compute the total amount of Bond financing needed for the expansion project. Bonds may only be issued in Face amounts of $1,000. The Bond will pay semiannually with an annual Coupon rate of 5.5%. The Market rate is 4%. Discuss your observations of the results. Please refer to the Project Requirements for complete instructions. $ Purple cells require a formula Yellow cells only require data. Per Bond information Face Number of Bonds issued Coupon Annual Coupon Payment per bond Market Term (years) 1,000 46,400 5.5% 55 4.0% 30 $ $ a. How much total Bond financing needed? b. At what price will the bonds trade after the initial issue? c. What are the company's total annual interest payments? d. What is the total market value of the bonds? 46,400,000 Note - this comes from Part 2 of the Project $1,260.71 2,552,000 58,496,789 $