First choice Ltd issues a 20-year semi-annual coupon bond with a face value of $1000 and a coupon rate of 8.5%. If the current market rate is 7% (compounded semi-annually), what is the current price of the bonds?

1. Which of the following statements relating to shareholders is true?

   		Shareholders are prioritised to receive the company's residual cash flow in liquidation
   		Shareholders have the priority in receiving dividend first before interest payment to debt holders
   		Dividend payments to shareholders are fixed and compulsory
   		Shareholders have the ability to vote for the board of directors

1. Krisbow Ltd issues a 10-year bond with an 8% coupon rate semi-annually and pays $1000 at maturity. If investors require an 8% yield to maturity (compounded semi-annually), what price should the bond sell for?

   		$543.61
   		$456.39
   		$1,000.00
   		$1,543.61