The following information applies to the next 4 questions. A major chemical manufacturer has experienced a...

The following information applies to the next 4 questions.

A major chemical manufacturer has experienced a market reevaluation lately due to a number of lawsuits. The firm has a bond issue outstanding with 20 years to maturity and a coupon rate of 7% (paid annually). The required rate has now risen to 10%. The par value of the bond is $1,000.

What is the current value of these securities?

		727.88
		744.59
		794.28
		818.10
		881.68

What is the current yield of this bond?

		8.12%
		8.22%
		8.35%
		8.55%
		9.40%

What would be the selling price of the same 7% coupon bond one year later, if the market interest rate remains at 10%?

		735.23
		749.05
		805.67
		823.56
		898.42

If the 7% coupon bond with time to maturity of 20 years is selling for $901.82, what is the yield to maturity of the bond?

		6.5%
		8.0%
		9.0%
		9.5%
		10.0%

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jeff jeffy answered 4 months ago

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