2. Annual coupon interest payments forLMT.GQ= $1,000 x 8.5% coupon rate =$85

Annual coupon interest payments forLMT.HHInterest = $1,000x6.15% coupon rate =$61.5

3. Current yield of the bondLMT.GQ= $1,000 x 2.148% yield rate =$21.48

Current yield of the bondLMT.HH= $1,000 X2.628% yield rate =$26.28

4. YTM for LMT.GQ = 2.148%

YMT forLMT.HH=2.628%

5.

a) The bond that will be more favorable to purchase is LMT.HH because it has higher actual return due to its yield rate being higher than the LMT.GQ. Moreover, the price is also lower than that of LMT.GQ.

b) The two bonds presented herein are callable. Yes, decisions will be affected if bonds are callable. Callable bonds give the issuer the ability to pay the bonds before maturity date, which provides a more favorable return.

c) If I were an investor, I will purchase the bonds primarily because although the entity has high debt to ratio than the industry, its times interest earned ratio shows that it is able to pay the interests regularly.

a) If you are going to buy a bond issued by THE COMPANY, which bond would

you choose? Why?

b) Are these bonds callable? If the bonds that you chose are callable (non-callable),

will it change your decision to buy them?

c) If you are an investor who is looking for a bond to invest in, are you going to buy

a bond that you chose? Take a look at the balance sheet and income statement of

the company. What data or ratios support your decision to buy this bond or not?