Pacific Western Corporation pays a 11 percent coupon rate on debentures due in 25 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,180. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. Assume the par value of the bonds is $1,000. Use Appendix B and Appendix D.

a. Find the theoretical market value of the bonds using semiannual analysis. (Round "PV Factor" to 3 decimal places. Round the final 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

No