Ariel, Inc

Essay

Ariel, Inc., issued $60 million face amount of 9% bonds when market interest rates were 9.30% for bonds of similar risk and other characteristics.
(a.)How much interest will be paid annually on these bonds?
(b.)Will the bonds be issued at a premium or discount? Explain your answer.
(c.)Will the annual interest expense on these bonds be more than, equal to, or less than, the amount of interest paid each year? Explain your answer.