a. The semiannual interest payments on the bonds =

14% stated rate * $60,000,000 face amount * 6/12 =$4,200,000

The term of the bonds is20 years, or40 semiannual periods.

The semiannual market interest rate is = 16% * 6/12 =8%

The present value of an annuity of $4,200,000 for 40 periods at 8% =

$4,200,000 * 11.9246 =$50,083,320

The present value of the maturity value of $60,000,000 in 40 periods at 8% =

$60,000,000 * 0.0460 =$2,760,000

The proceeds (issue price) of the bonds = PV of interest + PV of maturity value =

$50,083,320 + $2,760,000 =$52,843,320