question 1

A company issues 12%, 10-year $1,000 bonds paying interest semiannually. Required return for bonds of this risk is 15%. At what price will the bond be sold (pick closest answer)?

question 2

10% cumulative preferred stock , par value $10 and liquidation value $1 1 : 20. 000 shares authorized and issued : 10. 000 shares outstanding $100, 000 Common stock - authorized 50, 000 and 40. 000 outstanding; $ 1 par value $ 40. 000 Additional paid - in capital $350. 000 Retained earnings $230. 000Plan Status : December 31 , 2006 Accumulated Benefit Obligation ( ABO ) $90 million Projected Benefit Obligation ( PBO ) 95 million Plan Assets ( at fair value ) 80 million Unrecognized transition asset 1 1 million Unrecognized actuarial losses 1 million Assumptions :" Discount rate 0/08 Return on assets 90 0 Compensation growth 50/0