1.

BOND VALUATION

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 6.5%; and the yield to maturity is 11%. What is the bond's current market price? Round your answer to the nearest cent.

$

2.

Moerdyk Corporation's bonds have a 15-year maturity, a 7.25% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 6.20%, based on semiannual compounding. What is the bond's price?

a. $1,074.05

b. $1,129.12

c. $1,047.19

d. $1,157.35

e. $1,101.58