Question

QUESTION 1 Part 1 Madsen Motors's bonds have 22 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 11%; and the yield to maturity is 12%. What is the bond's current market price? Round your answer to the nearest cent.

part 2 A bond has a $1,000 par value, 12 years to maturity, and an 8% annual coupon and sells for $980.

1. What is its yield to maturity (YTM)? Round your answer to two decimal places.
   %
2. Assume that the yield to maturity remains constant for the next 4 years. What will the price be 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
   $   

part 3 Nesmith Corporation's outstanding bonds have a $1,000 par value, a 9% semiannual coupon, 20 years to maturity, and a 10.5% YTM. Whatis the bond's price? Round your answer to the nearest cent.

$   

Answer 1

1)

2)

a)

b)

3)