A company is aiming at raising $50 million debt for a new investment project. The company estimates that market investors would require 4.5% rate, whilst banks would charge 4.85%. The term of the debt is assumed to be 10 years. Considering that the company prefers to issue a 5% coupon bond (2.5% semi-annual), find:
1. The bond price at issue
2. The amount of debt issued (given the amount that the company wishes to collect)
3. The bond price one year after the issue if the new required rate is 4.8%
4. The amount of fees (in dollar and in % of the debt issued) that would make indifferent for the company issuing a corporate bond vs. taking up a bank loan.
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