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?

question 2

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%/0