b2

Fresh Water, Inc. sold an issue of 26-year $1,000 par value bonds to the public. The bonds have a 10.58 percent coupon rate and pay interest annually. The current market rate of interest on the Fresh Water, Inc. bonds is 11.05 percent. What is the current market price of the bonds?

Round the answer to two decimal places.

Your Answer:

c2

Pet Food Company bonds pay an annual coupon rate of 14.93 percent. Coupon payments are paid semiannually. Bonds have 26 years to maturity and par value of $1,000. Compute the value of Pet Food Company bonds if the market interest rate on this type of bond is 11.13 percent.

Round the answer to two decimal places.

d3

Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 21-year to maturity, carry a 14.22 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that these bonds would sell for $1,055 each. What is the yield to maturity for these bonds?

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).

You should use Excel or financial calculator.