Question
1. Madsen Motors's bonds have 19 years remaining to maturity Interest is paid annually; they have a $1,000 par value; the coupon interest rate is
1. Madsen Motors's bonds have 19 years remaining to maturity Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 6%; and the yield to maturity is 5%. Wha is the bond's current market price? Round your answer to the nearest cent. 2. A bond has a $1,000 par value, 15 years to maturity, and a 8% annual coupon and sells for $1,080. a) What its yield to maturity (YTM)? Round your answer to two decimal places. b) Assume that the yield to maturity remains constant fo the next 5 years. What will the price be 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
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