Stetson corporation just issued a 20-year, 9.75% annual coupon bond, with a face value of $1000. Similar bonds in the market have a yield maturity of 11%. The bond can be called in 6 years at a call price of $1,090.

a. What price should you pay for the bonds today?

b. what is the current yield on the bond?

c. what is the yield to call on the bond.

ii. after 4 years. Interest rates are expected to fall such that the yield to maturity on the bond will decline by 1.25%. What will the price of the bond be in 4 years?