13. Giant Electronics is issuing 20-year bonds that will pay coupons semiannuatly. The antinoul coupon rate on this bond is 7.8 percent. If the market rate for such boods is 7 pertent, what will the bonds sell for today? (Round to the nearest dollar) a. $1,037 b. $861 c. $1,085 d. $920 Answer: 14. Nauvoo, Incorporated, plans to issue new zero coupon bonds with a par value of $1,000 to fund a new project. The bonds will have a YTM of 5.07 percent and mature in 30 years. If we assume semiannual compounding, at what price will the bonds sell? a. $217.11 b. $222.68 c. $213.77 d. $215.25 c. $226.80 Answer: 15. The National Bank of the Shire has issued perpetual preferred stock with a $1,000 par value. The bank pays a quarterly dividend of $.80 on this stock. What is the current price of this preferred stock given a required rate of return of 8.5 percent? a. $43.25 b. $23.06 c. $37.65 d. $65.88 Answer: 16. Which one of the following statements is true of a bond's yield to maturity? a. A bond's yield to maturity changes daily as interest rates increase or decrease. b. The yield to maturity of a bond is the discount rate that makes the present value of the coupon and principal payments equal to the price of the bond. c. All of the items listed are true. d. It is the annual yield that the investor earns if the bond is held to maturity, and all the coupon and principal payments are made as promised