$($a$)$ A perpetual bond has annual coupon payments of $$85$ and the the required

return today is $8$ percent, at what price does the perpetual bond sell?

$($b$)$ Bicon has a bond with a coupon rate of $10$ percent, payable semi$-$annually.

It has $4$ years until maturity, and the yield to maturity is $4$ percent.

i$.$ What interest $($coupon$)$ payments do bondholders receive each year?

ii$.$ At what price does the bond sell?

iii. What will happen to the bond price if the yield to maturity increases

to $5$ percent?

$($c$)$ How much are you willing to pay for a $8-$year zero$-$coupon bond with a

$$1,000$ face value if the market wide interest rate is $5\mathrm{.}5$ percent?