A company issues $100,000 face value, 8% coupon paid semi-annually, 4-year U. S. corporate bonds on January 1, 20XO when the market rate for similar risk bonds is 12%. The firm uses the effective-interest amortization. What is the amount for the second interest expense payment?

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.