Fourthedition Township is issuing a 30-year bond with a face value of $ 50,000,000 and a stated

Question:

Fourthedition Township is issuing a 30-year bond with a of $ 50,000,000 and a stated annual interest rate of 4 percent. The city will make interest payments twice a year.
1. Calculate the semiannual interest payment.
2. Calculate how much Fourthedition Township will receive from the bond offering under the following conditions:
a. Market interest rates remain unchanged at the time of the offering.
b. Market interest rates increased to 4.2 percent at the time of the offering.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...