Answer:
d. $4,200,000
Explanation:
Options "$4,000,000 b.$4,420,000 $4,160,000 d. $4,200,000"
Face value of the bond = $4,000,000
Coupon rate = 10.5%
Life = 10 years
Issued at 105
Interest are paid semi annually
The requirement is "how much cash proceeds were received by Sun Devil when the bonds were issued on January 1, 20x1"
Bond issued at 105 means [100 = Par}, [5 = Premium]
So, the bond issue value = Face value + Premium value
Bond issue value = $4,000,000 + $4,000,000*1.05
Bond issue value = $4,000,000 + $200,000
Bond issue value = $4,200,000
