BOND VALUATION

Madsen Motors's bonds have 7 years remaining to maturity. Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 9.5%; and the yield to maturity is 12%. What is the bond's current market price? Round your answer to the nearest cent.

PRICE AND YIELD

A 7% semiannual coupon bond matures in 6 years. The bond has a face value of $1,000 and a current yield of 7.4648%. What is the bond's price? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the bond's YTM? (Hint: Refer to Footnote 7 for the definition of the current yield and to Table 7.1.) Do not round intermediate calculations. Round your answers to two decimal places. %

EXPECTED INTEREST RATE

Lourdes Corporation's 13% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 25 years, are callable 5 years from today at $1,025. They sell at a price of $1,281.79, and the yield curve is flat. Assume that interest rates are expected to remain at their current level.

1. What is the best estimate of these bonds' remaining life? Round your answer to two decimal places. years