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8.30 Rachette Corp. has 18-year bonds outstanding. Th ese bonds, which pay interest semiannually, have a coupon rate of 9.735 percent and a yield to

8.30 Rachette Corp. has 18-year bonds outstanding. Th ese bonds, which pay interest semiannually, have a coupon rate of 9.735 percent and a yield to maturity of 7.95 percent. a. Compute the current price of these bonds. b. If the bonds can be called in fi ve years at a premium of 13.5 percent over par value, what is the investors realized yield? c. If you bought one of these bonds today, what is your expected rate of return? Explain.

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