Answer:
1) It is not specified in the given information whether the market rate of interest is higher or lower than 7.75% when the Craft Foods bonds were issued.
2) The selling price of the bonds is determined by multiplying the face value of the bonds by the price percentage. In this case, the face value of the bonds is $750,000,000 and the price percentage is 100.5%, so the selling price would be:
$750,000,000 x 100.5% = $757,500,000
It's worth noting that the price percentage being 100.5% means that the bonds are being sold at a slight premium (i.e. above face value) and that the yield to maturity is lower than 7.75%.