question 1

On January 1, 2005, Systil Corporation issues $50 million, 10-year bonds with a coupon rate of 10%. Interest is payable annually at the end of the year. If the required return on bonds of similar risk at January 1, 2006, is 8%, what will be the price of the bonds be at this date?

question2

Rivaz Corporation 2005 Net Income $ 3. 000 Dividends $ 1. 000 Total Assets - 12/31/ 05 $35. 000 Total Liabilities - 12/ 3 1/ 05 $21 , 225 Number of shares outstanding* 1, 000 Cost of Equity 12%/010% 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