1. Stone Sour Corp. issued 25-year bonds 8 years ago at a coupon rate of 7.50 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM?

2. Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has five years to maturity, whereas Bond Dave has 16 years to maturity. If interest rates suddenly rise by 2%, what is the percentage change in the price of Bond Sam and Bond Dave?

Percentage change in price of Bond Sam = ?

Percentage change in price of Bond Dave = ?

3. Coccia Co. wants to issue new 16-year bonds for some much-needed expansion projects. The company currently has 9 percent coupon bonds on the market that sell for $1,095, make semiannual payments, and mature in 16 years.

What coupon rate should the company set on its new bonds if it wants them to sell at par?