What is the break-even coupon rate for the bond

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Question - The city of Lowell intends to issue a $25 million bond for the construction of new public athletic facilities, with coupons paid annually. The bond will reach maturity in 30 years. The city assumes a 3% discount rate during this time.

What is the break-even coupon rate for the bond?

Give answer as a decimal. E.g., if the rate is 8.8%, write 0.088.

What is the annual nominal value of each coupon payment at the break-even coupon rate?

Write out full numbers. Do not include $, commas, or words. E.g., write 8000000 instead of '8 million'. Decimals are fine, although you can omit them if you want.

What is the net present value at t=0 of the bond issuance and series of payments at the break-even rate?

Reference no: EM132966841

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