Cox Media Corporation pays a 7 percent coupon rate on debentures that are due in 10 years. The current yield to maturity on bonds of similar risk is 6 percent. The bonds are currently callable at $1,070. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Find the market value of the bonds using semiannual analysis. (Ignore the call price in your answer. Do not round intermediate calculations and round your answer to 2 decimal places.) Price of the bond b. Do you think the bonds will sell for the price you arrived at in part a? Yes O No Appendix Present value of $1. PV PV=Fv+ 0.583 0.614 0.558 1% 0.990 0.980 0.971 0.961 0.951 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.853 0.844 0.836 0828 0.820 0.780 0.742 0672 0 608 Percent 2% 3% 4% 5% 6% 7% 8% 0.980 0.971 0.962 0.952 0 .943 0.935 0.926 0.961 0.943 0.925 0.907 0.890 0.873 0.857 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.924 0.888 0.855 0823 0.792 0.763 0.735 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.888 0.837 0.790 0.746 0.705 0.666 0 630 0.871 0.813 0.760 0.711 0.665 0.623 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.837 0.766 0.703 0.6450.592 0.5.44 0.500 0.820 0.744 0.676 0508 0.463 0.804 0.722 0.650 0.585 0.527 0.475 0.429 0.625 0557 0.444 0.397 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.700 0.587 0.494 0.416 0.350 0296 0.250 0.686 0.570 0475 0.396 0331 0277 0.232 0.673 0.554 0456 0.377 0.312 0.258 0.215 06100478 0.375 0.2950 233 0.184 0.146 0552 04120308 0.231 0.174 01310.099 0453 0.307 0.208 0.1420.097 0.067 0046 0372 02280 1410087 0.054 0.034 0.021 0.557 0.497 9% 0.917 0.942 0.772 0708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0 116 0.075 0032 0.013 10% 11% 12% 0.909 0.901 0.893 0.826 0.812 0.797 0.75 0.731 0.712 0.683 0.659 0636 0.621 0.593 0.567 0.564 0.535 0507 0.513 0.482 0.452 0.467 0.434 0404 0.424 0.391 0.361 0.396 0.352 0.322 0.350 0.3120287 0.319 0.286 0.257 0.290 0.258 0.229 0.263 0.232 0.205 0.239 0.209 0.183 0.218 0.188 0.163 0.198 0.170 0.146 0.180 0.153 0.130 0.164 0138 0116 0149 0.124 0.104 00920.074 0.059 0.057 0.044 0033 0.02200150011 0.0090.005 0.003 Appendix B concluded) Present value of $1 Period 13% 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.047 0026 0.008 0.002 Percent 14% 15% 16% 17% 18% 19% 0.877 0.870 0.862 0.855 0.847 0.840 0.7690 .756 0.743 0.731 0.7180 .706 0.675 0.658 0.641 0.624 0.609 0.593 0.592 0.572 0.552 0.534 0.515 0.499 0.519 0.497 0.476 0.456 0.437 0.419 0.456 0.432 0.410 0.390 0.370 0.352 0.400 0.376 0.354 0.333 0.314 0.296 0.351 0.327 0 .305 0.285 0.266 0.249 0.308 0.284 0.263 0.243 0.225 0.209 0.270 0.247 0.227 0.208 0.19 0.176 0.237 0.215 0.195 0.178 0.162 0.148 0.208 0.187 0.168 0.152 0.137 0.124 0.182 0163 0.145 0130 0.116 0.104 0.160 0.141 0.125 0.111 0099 0088 0.140 0.123 0.108 0.095 0 084 0074 0.123 0 107 0 093 0.081 0.071 0.062 0.108 0.093 0.000 0 069 0.060 0,052 0.095 0.081 0069 0 059 0.051 0.044 008300700 060 0,051 0.043 0.037 0073 0061 0.051 0.043 0.037 0.031 0.038 0.0300024 0.0200016 0.013 0.020 0,015 0012 0.009 0.007 0.005 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.001 0.001 0 0 0 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0065 0054 0.045 0.038 0.031 0.026 0.010 0.004 0.001 25% 0.800 0.640 0 .512 0.410 0 0.328 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0055 0044 0035 0028 0023 0018 0.014 0.012 0004 0.0010 0 30% 0.769 0.592 0.455 .350 0.269 0 0.207 0.159 0.123 0 0.094 0.073 0.056 0.043 0.033 0.025 0.0200 0,015 0.012 0.009 0 0.007 0.005 0.001 0 0 35% 40% 0.741 0.714 0.549 0.510 0.406 0.364 0.301 0.260 .223 0.186 0.165 0.133 0.122 0.095 .091 0.068 0.067 0.048 0.050 0.035 0.037 0.025 0.027 0.018 0.0200 013 0,015 0,009 .011 0.006 0.008 0.005 0.006 0.003 .005 0.002 0.003 0.002 0.002 0001 0.001 0 50% 0.667 0.444 0.296 0.198 0.132 0.088 0.059 0.039 0.026 0. 017 0.012 0.008 0.005 0.003 0.002 0.002 0.001 0.001 0 0 0 0 Appendix D (concluded) Present value of an annuity of $1 50% 0.667 1111 1407 1.605 1.737 1.824 1.883 1.922 1.948 1.965 1977 2 13% 0.885 1.668 2.351 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6,302 6.462 6.604 6.729 6.840 6.938 7.025 7.330 7.496 7 634 7.675 Percent 14% 15% 16% 17% 18% 19% 20% 0.877 0.870 0.862 0.855 0.847 0.840 0.833 1.647 1626 1.605 1.585 1.566 1547 1 5281 2322 2283 2.246 2210 2174 2.140 2 106 2.914 2.855 2.7982 743 2 690 2639 2 589 3.433 3.352 3.274 3.199 3 .127 3.058 2.991 3.889 3.784 3.685 3.589 3.498 3.410 3.326 4.289 4.160 4 .039 3.922 3.812 3.706 3.605 4.639 4.487 4.344 4.207 4.078 3.954 3.937 4.946 4.7724.607 4.451 4.303 4.163 4.0313 5.216 5.019 4,833 4.659 4.494 4,339 4.192 5.453 5234 5.0294 836 4 656 4.485 4327 5.660 5421 5.1974 9884.793 4611 4439 584255835.342 5.118 4.910 4.715 4.5333 6.002 5724 5.468 52295.0084 802 4511 6.142 5.847 5.575 5.324 5.092 4.876 4 675 6.265 5.954 5.668 5.405 5.162 4.938 4.730 6.373 6.047 5.749 5 475 5.222 4.988 4.7753 6.467 6.128 5.818 5534 5.223 5,033 4812 3 6.550 6.198 5.877 5 .584 5.316 5.070 4.843 6.623 6.259 5.929 5.628 5.353 5 .101 4.870 6.873 6.464 6.097 5.766 5.467 5.195 4 .948 7.003 6.566 6.177 5.8295 .517 5.235 4.979 71056642 623358715.548 5.2584.997 7.133 6.661 6.246 5880 5,554 5.262 4.999 25% 0.800 ,440 1.952 2.352 2.689 2.951 3.161 3.329 .463 3.571 3.656 3.725 .780 3.824 3.859 3.887 .910 .928 3.942 3.954 3.985 3.995 3.999 4.000 30% 0.769 1361 1.816 2 166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3249 .268 3.283 3.295 3.304 3.311 3.316 3.329 3.332 3.333 3.333 35% 40% 0.741 0.714 1.289 1.224 1696 1.589 1.997 1849 2.220 2.035 2.385 2.168 2.508 2.263 2.598 2.331 2.665 2.379 .715 2.414 2.752 2.438 2.7792.456 2.779 2.799 2.469 2814 2.478 2825 2484 2.834 2.489 2.840 2.492 2.844 2.494 2.848 2.496 2.850 2.497 2.856 2.499 2.857 2.857 2.500 2.857 2.500 1985 3 1.990 1.993 1.995 1.997 1.998 1.999 1.999 1.999 2000 2000 2000 2.000 30... 2.500 40 50