Question 6

a) The 7.4 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Currently, the bonds sell for $985. What is the yield to maturity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

b) You own a bond that pays $54 in interest annually. The face value is $1,000 and the current market price is $1,015.55. The bond matures in 15 years. What is the yield to maturity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

c) Dexter Mills issued 30-year bonds one year ago at a coupon rate of 10.5 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM is 7.3 percent, what is the current bond price?

(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)