$2\mathrm{.}2.$ How many bonds will the company have to issue for its expansion project?

ANSWER:

bonds

$2\mathrm{.}3.$ Are these bonds selling at par, a discount or a premium? Explain what causes this bond to

be selling at par, a discount or a premium? $[9$ points$]$

ANSWER: These bonds are selling at

because

$2\mathrm{.}4.$ If the market rate for these bonds decreases to $4\%$ in $3$ years after the issuance, what will

be the market price of these bonds in $3$ years? $[9$ points$]$points$]$