QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

54. On 1 January 2011 the market rate of interest on a company’s bonds is 5% and it issues a bond with the following characteristics: Face value €50 millionCoupon rate, paid annually 4%Time to maturity 10 years (31 December 2020)Issue price (per €100) 92.28If the company uses IFRS, its interest expense (in millions) in 2011 is closest to: A. €1.846. B. €2.307. C. €2.386.