On February 1, 2009, Rogers, Inc. sold a $500 million bond issue to finance the purchase of a new manufacturing facility. These bonds were issued in $1,000 denominations with a maturity date of February 1, 2029. The bonds have a coupon rate of 4.00% with interest paid semiannually.

Required:

1. Determine the value today, February 1, 2019 of one of these bonds to an investor who requires a 8 percent return on these bonds. Why is the value today different from the par value?
2. Assume that the bonds are selling for $875. Determine the current yield and the yield-to-maturity. Explain what these terms mean.
3. As discussed in class, explain which layers/textures of risk would be inherent for a 10-year Treasury bond, 10-year Rogers bond and Rogers common stock.