Red Rose Designs is preparing a bond offering with a 7 percent coupon rate and a face value of $1,000. The bonds will be repaid in 5 years. The company plans to issue the bonds at par value and pay interest semiannually. Given this, which one of the following statements is correct?
a. The bonds will be sold at a discount.
b. The bonds will pay five interest payments of $70 each.
c. The bonds will sell at a premium if the market rate is 7.5 percent.
d. The bonds will initially sell for $965 each.
E. The final payment will be in the amount of $1,035