Suburbia plans to issue bonds to finance

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Reference no: EM131893709

Suburbia plans to issue bonds to finance $3,000,000 construction. The town pays for its capital projects on pay-as-you-go basis. Suburbia has approved issuance of 10-year bonds with the coupon rate of 2.5% (this annual rate is compounded semi-annually). Calculate the potential price of the Suburbia bonds, using market rates of 3% and 1.5%. Make sure to use both the level debt service and level principal schedules for bond price calculations. Which types of bonds would you recommend to issue and why? (This assumes that both are available to the city, which is not the case.) Are there other financing options you may recommend? (You are allowed to use the MA Department of Revenue debt service calculator as long as you will remember to enter all items correctly.) Please show excel work----

Reference no: EM131893709

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