a) Madsen Motors's bonds have 23 years remaining to maturity. Interest is paid semi-annually, they have a $1,000 par value, the coupon rate is 9%, and the yield to maturity is 11%. (i) What interest payments do bondholders receive each year? (ii) What is the bond's current market price? (iii) What will happen to the bond price if the yield to maturity increases to 13 percent? (iv) What will happen to the bond price if the yield to maturity falls to 8 percent?

b) A perpetual bond has annual coupon payments of $75 and the the required return today is 8 percent, at what price does the perpetual bond sell?

c) What is the price of a 8-year, zero coupon bond paying $1,000 at maturity if the YTM is 6.5 percent?