The company plans to raise $500 000 by issuing 10-year corporate bonds that pay interest at 6% annually. The cash will be used in the expansion of offices and an equipment base in Windsor, Ontario.
a. How much bond interest is to be paid each year?
b. Current financial market conditions have resulted in a bond price to yield 5.4% annually. What is the current market price of the bonds?
c. For an investor, construct a schedule to amortize the premium or discount