A high-yield bond has the following features: $1000 par value, coupon of 11.5%, matures in 10 years, callable after 2 years with a penalty of 1 year's interest.

1. If comparable yields are 12%, what should the price of this bond be?
2. Would you expect the firm to call the bond if yields are 12%?
3. If current yields are 8%, what should the price of the bond be?
4. Would you expect the firm to call the bond today if yields are 8%?
5. If you expect the bond to be called after three years, what is the maximum price you would pay for the bond if the current interest rate is 8%?