A) (Bond valuation)Pybus, Inc. is considering issuing bonds that will mature in 22 years with an annual coupon rate of 9 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 8.5 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 9.5 percent. What will be the price of these bonds if they receive either an A or a AA rating?

a. The price of the Pybus bonds if they receive a AA rating will be $ enter your response here. (Round to the nearest cent.)

b. The price of the Pybus bonds if they receive an A rating will be $enter your response here. (Round to the nearest cent.)

B) (Yield to maturity)Fitzgerald's 15-year bonds pay 7 percent interest annually on a $1,000 par value. If the bonds sell at $935, what is the bond's yield to maturity? What would be the yield to maturity if the bonds paid interest semiannually? Explain the difference.

a. The bond's yield to maturity if the bond pays interest annually is enter your response here %. (Round to three decimal places.)

b.The bond's yield to maturity if the bond paid interest semiannually would be enter your response here %. (Round to three decimal places.)

c.Based on the findings in parts a and b, which of the following statements is correct?(Select the best choice below.)

A. Other things being equal, the YTM is higher for an annual bond than a semiannual bond if the bond is selling at a discount.

B. Other things being equal, the YTM is the same for both an annual bond and a semiannual bond if the bond is selling at a premium.

C. Other things being equal, the YTM is the same for both an annual bond and a semiannual bond if the bond is selling at a discount.

D.Other things being equal, the YTM is higher for a semiannual bond than an annual bond if the bond is selling at a discount.