As an investor, you are considering buying a bond that pays 7% semiannual coupon. This bond has a $10,000 face value and will mature in 25 years. If your required rate of return is 5.8% for bonds in this risk class, what is the highest price you would be willing to pay?

2) On Aug 15^th, 2016 you are offered the following bond:

Face value $250 (par value)

Coupon rate 7%

Coupon frequency semiannual (8/15 & 2/15)

Maturity date Aug 15, 2058

First call date February 15, 2027

Call premium 3% of the face value

Bond current market price $300

Calculate the yield to maturity.

What is the current yield

Calculate Yield to Call