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8.1 Bond price: BA Corp is issuing a ten-year bond with a coupon rate of 8 percent. The interest rate for similar bonds is currently 6 percent. Assuming annual payments, what is the value of the bond? n rate of 8 percent. ming annual 8.2 Bond price: Pierre Dupont just received a cash gift from his grandfather. He plans invest in a five-year bond issued by Venice Corp that pays an annual coupon of 5.5 percent. If the current market rate is 7.25 percent, what is the maximum amoun Pierre should be willing to pay for this bond? om his grandfather. He plans to pays an annual coupon of what is the maximum amount 8.3 Bond price: Knight, Inc., has issued a three-year bond that pays a coupon of 6.10 percen made semiannually. Given the market rate of interest of 5.80 percent, what is the market v a coupon of 6.10 percent. Coupon payments are ent, what is the market value of the bond? 8.4 Bond price: Regatta Inc. has seven-year bonds outstanding that pay a 12 percent coupon rate. Investors buying these bonds today can expect to earn a yield to maturity of 8.875 percent. What is the current value of these bonds? Assume annual coupon payments. at pay a 12 percent earn a yield to nds? Assume annual 8.5 Bond price: You are interested in investing in a five-year bond that pays 7.8 percent coupon with interest to be received semiannually. Your required rate of return is 8.4 p What is the most you would be willing to pay for this bond? that pays 7.8 percent rate of return is 8.4 percent. 8.6 Zero coupon bonds: Diane Carter is interested in buying a five-year zero coupon bond whose face value is $1,000. She understands that the market interest rate for similar investments is 9 percent. Assume annual coupon payments. What is the current value of this bond? uying a five-year zero rstands that the market ume annual coupon 8.7 Zero coupon bonds: Ten-year zero coupon bonds issued by the U.S. Treasury hav of $1,000 and interested is compounded semiannually. If similar bonds in the mark percent, what is the value for these bonds? sued by the U.S. Treasury have a face value . If similar bonds in the market yield 10.5 8.8 Zero coupon bonds: Northrop Real Estate Company is planning to fund a develop issuing 10-year zero coupon bonds with a face value of $1,000. Assuming semiann what will be the price of these bonds if the appropriate discount rate is 14 percent? planning to fund a development project by 1,000. Assuming semiannual compounding, scount rate is 14 percent? 8.9 Yield to maturity: Ruth Hornsby is looking to invest in a three-year bond that pays sem coupon payments at a rate of 5.875 percent. If these bonds have a market price of $98 yield to maturity and effective annual yield can she expect to earn? ree-year bond that pays semiannual s have a market price of $981.13, what o earn? 8.10 Yield to maturity: Rudy Sandberg wants to invest in four-year bonds that are curre $868.43. These bonds have a coupon rate of 6 percent and pay semiannual coupon What is the current market yield on this bond? ear bonds that are currently priced at pay semiannual coupon payments. 8.11 Realized yield: Josh Kavern bought ten-year, 12 percent coupon bonds issued by the U at $913.44. If he sells these bonds, which have a face value of $1,000, at the current pric realized yield on the bonds? Assume similar coupon-paying bonds make annual coupon ercent coupon bonds issued by the U.S. Treasury three years ago ace value of $1,000, at the current price of $804.59, what is the n-paying bonds make annual coupon payments. 8.12 Realized yield: Four years ago, Lisa Stills bought six-year, 5.5 percent coupon bonds Fairways Corp. for $947.68. If she sells these bonds at the current price of $894.52, wh realized yield on the bonds? Assume similar coupon-paying bonds make annual coupo ar, 5.5 percent coupon bonds issued by the e current price of $894.52, what will be the ng bonds make annual coupon payments