6) C onsider two bonds, A and B. Both bonds interest of $120 annually. Bond yields to maturity on the two bonds change from 12% to 1 presently are selling at their par value of $1,000. Each pay A will mature in 5 years while bond B will mature in 6 years. If the 4% both bonds will increase in value but bond A will increase more than bond B both bonds will increase in value but bond 8 will increase more than bond A a) b) th bonds will decrease in value but bond A will decrease more than bond 8 d) both bonds will decrease in value but bond B will decrease more than bond A 7) A bond ha s a coupon of 6%, pays interest annually, has a par value of $1,000, matures in 5 years, and is selling today at a $924.75. What is the current vield for this bond? a) 6.00% b) 6.49% c) 6.73% d) 7.88% 8) What is the yield to maturity (YTM) of the bond in the question above? a) 6.00% b) 6.49% c) 6.73% d) 7.88% 9) Taylor's Men's Wear has a debt-equity ratio of 42 percent, sales of $749,000, net income of $41,300, and total debt of $206,300. What is the return on equity? a) b) c) 7.79% 8.41% 8.74% d) 9.09% Page 2