1. The Lone Star Company has $1,000 par value bonds outstanding at 9 percent interest. The bonds will mature in 25 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the current price of the bonds if the present yield to maturity is. (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)

a. 6%. b. 9%, c. 12%

2. Midland Oil has $1,000 par value bonds outstanding at 19 percent interest. The bonds will mature in 25 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the current price of the bonds if the present yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)

a. 10%. b. 9%, c. 13%

3. Exodus Limousine Company has $1,000 par value bonds outstanding at 16 percent interest. The bonds will mature in 50 years. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the current price of the bonds if the percent yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)

a. 5% b. 6%

4. Essex Biochemical Co. has a $1,000 par value bond outstanding that pays 18 percent annual interest. The current yield to maturity on such bonds in the market is 11 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the price of the bonds for the maturity dates: (Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)

a. 30 years b. 17 years c. 2 years

5. Kilgore Natural Gas has a $1,000 par value bond outstanding that pays 13 percent annual interest. The current yield to maturity on such bonds in the market is 15 percent. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Compute the price of the bonds for these maturity dates: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.)

a. 30 years b. 16 years c. 7 years

6.Jim Busby calls his broker to inquire about purchasing a bond of Disk Storage Systems. His broker quotes a price of $1,140. Jim is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 12 percent interest, and it has 15 years remaining until maturity. The current yield to maturity on similar bonds is 10 percent(Do not round intermediate calculations. Round your final answer to 2 decimal places. Assume interest payments are annual.)

a. Calculate the present value of the bond

b. Do you think the bond is overpriced?

7. Bonds issued by the Coleman Manufacturing Company have a par value of $1,000, which of course is also the amount of principal to be paid at maturity. The bonds are currently selling for $770. They have 10 years remaining to maturity. The annual interest payment is 9 percent ($90).

Compute the yield to maturity. (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

8. Stilley Resources bonds have 20 years left to maturity.Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 21.5 percent.

If the price of the bond is $1,270, what is the yield to maturity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

9. Evans Emergency Response bonds have 8 years to maturity. Interest is paid semiannually. The bonds have a $1,300 par value and a coupon rate of 8 percent.

If the price of the bond is $1,088.52, what is the annual yield to maturity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

10. Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 9 percent and theinterest is paid semiannually. The yield to maturity on the bonds is 12 percent annual interest. There are 9 years to maturity.

Compute the price of the bonds based on semiannual analysis. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)