Assignment Problems 1. ABC Corporation issues a bond which has a coupon rate of 10.20%, a yield to maturity of 9.75%, a face value of $1,000, and a market price of $1,150. what is the annual interest payment? Round to two decimal places. 2. A shipping company sold an issue of 16-ycar $1,000 par bonds to build new ships. The bonds pa 825% interest, compounded semiannually. Today's required rate of return is 6.80%. How should these bonds sell for today? Round to two decimal places. 3, Assume a company has an issue of 19-year $1,000 par value bonds that pay 4.5% interest, compounded annually. Further assume that today's required rate of return on these bonds is 6%. How much would these bonds sell for today? Round to two decimal places. 4. ABC Company issued bonds on January 1, 2006, The bonds had a coupon rate of 5.0%, with interest paid semiannually. The face value of the bonds is $1,000 and the bonds mature on January 1, 2024. What is the yield to maturity for these bonds on January 1, 2016 if the market price of the bond on that date is $1,100? 5. A S1,000 par value 12-year bond with a 14 percent coupon rate recently sold for $925. What is the yield to maturity? Assume semiannual payments and submit your answer as a percentage rounded to two decimal places. 6. Consider a 10 year bond with face value S 1,000 that pays a 6.8% coupon semi-annually and has a yield-to-maturity of 8.4%. What is the approximate percentage change in the price of bond if interest rates in the economy are expected to decrease by 0.60% per year? Submit your answer as a percentage and round to two decimal places. (Hint: What is the expected price of the bond before and after the change in interest rates?) ACME, Inc. expects its current annual $3.25 per share common stock dividend to remain the same for the foreseeable future. What is the intrinsic value of the stock to an investor with a required return of 65%? Round to two decimal places 7