Gifford Cark is a recent retiree who is interested in investing some of his savings in corporate bonds. His finanoial planner has suggested the foliowing bonds: - Bond A has a 7% annual coupon, matures in 12 years, and has a $1,000 face value. - Bond B has a 13% annual coupon, matures in 12 years, and has a $1,000 face value. - Band c has a 10\% annut toupon, matires in 12 years, and has $1,000 face value. Each bond has a yield to maturity of 10%. The dots has been coltected in the wicrost. Excel flie below. Downioad the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations. Use a minus sign to enter negative values, if any. If an answer is zero, enter " 0 ". Downlead spreadshest Bond Yalvetien-borzboxisx - Before caladeving the prices of the bonds, indicite whether each bond is trading at a premium, at a discount, or at par. Bond A is selling at because its coupon rate is the going interest rate. Bond B is selfing at because its coupon rate is the goting thiterest rate: bond C is seming at bechuse its coupon rate is f the going interest rate. b. Calculate the price of each of the three bonds. Round your answers to the nearest cent. Price (8ond A): s Price (Bond B): s Frice (8ond C)r : c. Calcatate the current yield for each of the three bonds. (Hint: The expected current vild is calculated as the annual interest divided by the price of the bond.) found your answers to two decimal placeet. c. Caiculate the current yield for each of the three bonds. (thint; The expected current yield is calculated as the annual interest divided by the prict of the hond ) Round your answers to the decimal places Girrent yield (Bond A): Ourrent vield (Bond B): Cirrent yleld teond C): d. If the yield to maturity for each bond remains at. 10%, what will be the price of each bond 1 year from now? Round your answers to the nearest cent. Price Foond AY: 5 Price (Bond B): $ frice tosind Ct:s What is the expected capital gains yield for each bond? What is the expected total retum for each bond? Round your answers to two decimal places. e. Mr, Oark is considering anorher bond, Bond D. tt has a 9% semiannual coupon and a $1,000 face value (Le, it pays a $45 coupon every 6 months). Bond D is scheduled to mature in 8 years and hes a price of $1,110. It is also caliable in 5 years at a call price of $1,020. 1. What is the bonds nominal yleld to maturity? Round your answer to two decimal places: 2. What is the bond's nominal yield to calr Rouqd your answer to two decimal plocs. 3. If Mr. Cark were to purchase this bond, would he be more ikefy to receive the vield to maturity or vield to call? Explain your answer. Q. Calculate the price of each bond (A, B, and C) at the end of each year until maturity, assuming interest rates remain constant. Round your answers to the nearest cent: Create a graph showing the bine path of each bond's value. Choose the correct graph. The correct graph is A. c. B. D. 1. What is the expected current yeld for each bond in each year? Round your answers to two decimal places. 2. What is the expected capital gains yield for each bond in each year? Round your answers to two decimal ploces. 2. What is the expected capital gains yield for each bond in each year? Round your answers to two decimal places. 3. What is the total return for each bond in each year Round your answers to two decimal places. 3. What is the total retum for each bond in each year? Round your answers to two decimal places
