A $1,000 par value bond was issued 25 years ago at a 12 percent coupon rate, paid semiannually. It currently has 20 years remaining to maturity. Interest rates on similar debt obligations are now 8 percent. Use Appendix B and Appendix D.

a. What is the current price of the bond? (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.)

Price of the bond $

b. Assume Igor Sharp bought the bond three years ago, when it had a price of $1,035. What is his dollar profit based on the bonds current price? (Round "PV Factor" to 3 decimal places. Round the final answer to 2 decimal places.)

Dollar profit $

c. Further assume Igor Sharp paid 20 percent of the purchase price in cash and borrowed the rest (known as buying on margin). Igor used the interest payments from the bond to cover the interest costs on the loan. How much of the purchase price of $1,035 did Igor Sharp pay in cash?

Purchase price $

d. What is Igors percentage return on his cash investment? (Round "PV Factor" to 3 decimal places. Round the your intermediate calculations to 2 decimal places. Round your final answer to 2 decimal places.)

Percentage return %

e. Not available in Connect.