Question 5 :

A- Northern Warehouses wants to raise $12 million to expand its business. To accomplish this, it plans to sell 35-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 6 percent. What is the minimum number of bonds it must sell to raise the $12 million it needs?

Multiple Choice

• 190,028
• 95,014
• 99,257
• 79,905
• 72,641

B- Oil Well Supply offers a 7 percent coupon bond with semiannual payments and a yield to maturity of 7.73 percent. The bonds mature in 9 years. What is the market price per bond if the face value is $1,000?

Multiple Choice

• $1,016.95
• $1,401.86
• $953.88
• $1,401.26
• $953.28

C -Oil Well Supply offers a 7 percent coupon bond with semiannual payments and a yield to maturity of 7.73 percent. The bonds mature in 9 years. What is the market price per bond if the face value is $1,000?

Multiple Choice

• $1,016.95
• $1,401.86
• $953.88
• $1,401.26
• $953.28

D - edesigned Computers has 7 percent coupon bonds outstanding with a current market price of $876.24. The yield to maturity is 8.34 percent and the face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures?

Multiple Choice

• 26 years
• 20 years
• 18 years
• 17 years
• 19 years