1) On Aug 15th, 2016, you are offered the following bond:

Face value $250 (par value)

Coupon rate 7%

Coupon frequency semiannual (8/15 & 2/15)

Maturity date Aug 15, 2058

First call date February 15, 2027

Call premium 3% of the face value

Bond current market price $300

a) What is the yield to maturity?

b) What is the Yield to Call?

c) What is the current yield?

2) As an investor, you are considering buying a bond that pays 7% semiannual coupon. This bond has a $10,000 face value and will mature in 25 years. If your required rate of return is 5.8% for bonds in this risk class, what is the highest price you would be willing to pay?

Bonus: Referring to problem 2, Assuming required rate of return remains at 5.8%. What would you expect the price of this bond to be in 4 years?

show work on Excel, please.