Ch 04: Assignment - Bonds Valuation Issuing Company Annual Coupon Rate Smith Enterprises 6% Irwin Incorporated 12% Johnson Metalworks 9% Each bond has 10 years until maturity and has the same risk. Their yield to maturity (YTM) is 9%. Interest rates are assumed to remain constant over the next 10 years. Label the curves on the following graph to indicate the path that each bond's price, or value, is expected to follow. BOND VALUE ($1 1200 1100 1000 900 800 700 600 10 YEARS TO MATURITY Based on the preceding information, which of the following statements are true? Check all that apply. Irwin's bonds are a better investment than Smith's bonds. The expected capital gains yield for Smith's bonds is positive. O Johnson's bonds are a better investment than Irwin's bonds. O All of the bonds will have the same value when they reach maturity. Smith just registered and issued its bonds, which will be sold in the bond market for the first time. Smith's bonds would be referred to as