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5. Suppose Loblaws Inc. sold an issue of bonds with a 30-year maturity, $1500 par value, a 13% coupon rate, and semi-annual interest payments a)

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5. Suppose Loblaws Inc. sold an issue of bonds with a 30-year maturity, $1500 par value, a 13% coupon rate, and semi-annual interest payments a) Three years after the bonds were issued, the going interest rate on bonds such as these fell to 10%. At what price would the bonds sell? b) Suppose that, three years after the bond's issue, the going rate of interest had risen to 15%. At what price would the bonds sell? Three years after bonds were issued, the closing price of the bond is $1,400. What is the nominal annual current yield? c)

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