all questions if possible

7-12 YIELD TO CALL It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has an 8% annual coupon and had a 30-year original maturity. (It matures on December 31, 2045.) There is 5 years of call pro- tection (until December 31, 2020), after which time it can be called at 108-that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 119.12% of par, or $1,191.20. a. What is the yield to maturity? What is the yield to call? b. If you bought this bond, which return would you actually earn? Explain your reasoning. c. Suppose the bond had been selling at a discount rather than a premium. Would the yield to maturity have been the most likely return, or would the yield to call have been most likely? 7-13 PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.5401%. What are the bond's price and YTM? (Hint: Refer to footnote 6 for the definition of the current yield and to Table 7.1.) 7-14 EXPECTED INTEREST RATE Lourdes Corporation's 12% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 25 years, are callable 6 years from today at $1,025. They sell at a price of $1,278.56, and the yield curve is flat. Assume that interest rates are expected to remain at their current level. a. What is the best estimate of these bonds' remaining life? b. If Lourdes plans to raise additional capital and wants to use debt financing, what cou- pon rate would it have to set in order to issue new bonds at par? BOND VALUATION Bond X is noncallable and has 20 years to maturity, an 8% annual cou- pon, and a $1,000 par value. Your required return on Bond X is 9%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to th similar risk will be 7.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) 7-15 7-12 YIELD TO CALL It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has an 8% annual coupon and had a 30-year original maturity. (It matures on December 31, 2045.) There is 5 years of call pro- tection (until December 31, 2020), after which time it can be called at 108-that is, at 108% of par, or $1,080. Interest rates have declined since it was issued, and it is now selling at 119.12% of par, or $1,191.20. a. What is the yield to maturity? What is the yield to call? b. If you bought this bond, which return would you actually earn? Explain your reasoning. c. Suppose the bond had been selling at a discount rather than a premium. Would the yield to maturity have been the most likely return, or would the yield to call have been most likely? 7-13 PRICE AND YIELD A 7% semiannual coupon bond matures in 4 years. The bond has a face value of $1,000 and a current yield of 7.5401%. What are the bond's price and YTM? (Hint: Refer to footnote 6 for the definition of the current yield and to Table 7.1.) 7-14 EXPECTED INTEREST RATE Lourdes Corporation's 12% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 25 years, are callable 6 years from today at $1,025. They sell at a price of $1,278.56, and the yield curve is flat. Assume that interest rates are expected to remain at their current level. a. What is the best estimate of these bonds' remaining life? b. If Lourdes plans to raise additional capital and wants to use debt financing, what cou- pon rate would it have to set in order to issue new bonds at par? BOND VALUATION Bond X is noncallable and has 20 years to maturity, an 8% annual cou- pon, and a $1,000 par value. Your required return on Bond X is 9%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to th similar risk will be 7.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) 7-15