Question: 12 Power Solutions Ltd. issues a $14,000,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid up front, are $896,000. The bond sells at

12 Power Solutions Ltd. issues a $14,000,000, five-year, 4.5% bond with semi-annual

Power Solutions Ltd. issues a $14,000,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid up front, are $896,000. The bond sells at par. Required: 1. How much cash does Power receive when the bond is issued? Power receives 2. What is the effective interest rate on the bond? (Round your answer to the nearest whole percentage.) Effective interest rate per annum %

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