When fixed coupon bonds are issued at a discount:

A coupon interest paid decreases each period as bond discount is amortized.

B pre-tax earnings of the firm decrease over the life of the bond as the bond discount is amortized.

C book value of the bond liability decreases over the life of the bond as the bond discount is amortized.

A firm issues a $5 million zero coupon bond with a maturity of four years when market rates are 8 percent. Assuming semiannual compounding periods, the total interest expense on this bond is:

A $0.

B $1,346,549.

C $1,600,000.