(Determining the proceeds from a bond, LO 3) On December 1, 2005 Koidern Inc. (Koidern) will be making a $5,000,000 bond issue to public investors. The bond matures in eight years on November 30, 2013 and pays interest annually on November 30. The effective interest rate on December 1, 2005 is expected to be 9%.

Indicate how much Koidern will receive in proceeds from its bond if the coupon rate on the bond is:

a. 10%

b. 9%

c. 8%