1 2 cu APPALACHIAN POWER COMPANY 10 4. 12 13 14 15 56 17 RE 19 20 23 Assume the Appalachian Power Company (APC) bond pays semiannual interest on February 1 and August 19 1. How much will each semi-annual coupon payment be? 2. What is the effective yield of the bond if it is priced at face value? 3. On August 2, 2010, the price of the bond was quoted at 110.0% ($110.00 per $100 of face value). What was the bond's YTM? 4. Now assume it is August 20, 2011. Bonds comparable to the Appalachian Power Company bond are yielding 5.84%. Estimate the price of APC's bonds at that time. 30 31 1 2 cu APPALACHIAN POWER COMPANY 10 4. 12 13 14 15 56 17 RE 19 20 23 Assume the Appalachian Power Company (APC) bond pays semiannual interest on February 1 and August 19 1. How much will each semi-annual coupon payment be? 2. What is the effective yield of the bond if it is priced at face value? 3. On August 2, 2010, the price of the bond was quoted at 110.0% ($110.00 per $100 of face value). What was the bond's YTM? 4. Now assume it is August 20, 2011. Bonds comparable to the Appalachian Power Company bond are yielding 5.84%. Estimate the price of APC's bonds at that time. 30 31