Final answer:
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4%. The purchaser of the bond will receive cash flows every 6 months until the bond matures. The price an investor is willing to pay for the bond depends on the market interest rate.
Step-by-step explanation:
When a bond is issued, it promises to make periodic interest payments to the bondholder and to repay the face value of the bond at maturity. In this case, Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. The interest payments on the bond are made semi-annually, so the purchaser of the bond will receive cash flows every 6 months until the bond matures.
Regarding whether an investor would be willing to pay more or less than face value for this bond, it depends on the market interest rate at the time of purchase. If the market rate is higher than the bond's stated rate, then the bond would be less attractive and the investor may be willing to pay less than face value for it. Conversely, if the market rate is lower, then the bond would be more attractive and the investor may be willing to pay more than face value.