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Autopia is planning to issue a bond with a face (par) value of $400,000,000 and a stated interest rate (coupon rate) of 4 percent. Interest payments are made twice annually for a 30-year term.
A. What will be the amount of each semi-annual interest payment on the bond?
B. How much can the New University expect to receive at bond issuance, assuming that the interest rate at issuance is the same as the coupon rate?
C. How much will Autopia receive if interest rates have increased to 4.5 percent at the time of issuance?

Sagot :

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