1: The current required rate of return on a bond issued by Who LTD is 11 percent. "Who" has a bond issue outstanding that pays interest semiannually, is selling for $845 and matures in 8 years. What is the approximate coupon rate on the outstanding bond?

2: What is the market value of a zero coupon bond with 5 years to maturity? The bond was originally sold with a yield to maturity equal to 11 percent, but the market rate today is 9 percent.

3:By the capitalization-of-cash flows method, the value of an asset is a function of

4: What would a GMA 6% coupon bond maturing in 14 years sell (approximately) for if the current yield is 6.8633% and the yield-to-maturity is 7.48%? :

5:There are consequences associated with not paying interest to bondholders. Which of the following apply?

I. Not paying an interest payment automatically puts the company in default making the entire loan due. II. Interest on debt is not required to be paid, but the corporation generally pays it for public relations reasons.

6: Determine the value of a $1,000 Canadian Pacific Limited perpetual 4 percent debenture (bond) at the following required rates of return: a. 4 percent