Question: Mega Corp. issues $1,000 par value bonds with a ten-year maturity and a coupon rate of 2.75%. The underwriting spread is 2.25%. Calculate the proceeds

Mega Corp. issues $1,000 par value bonds with a ten-year maturity and a coupon rate of 2.75%. The underwriting spread is 2.25%. Calculate the proceeds to the issuer and the proceeds to the underwriters for each bond issued. Who bears the risk, the issuer or the underwriters, if the bonds are sold below $1,000 par value?

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