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Suppose Wilhite Co. issues $1,000 bonds with 20 years to maturity. The annual coupon is $110. Similar bonds have a yield to maturity of 11%.

  1. Suppose Wilhite Co. issues $1,000 bonds with 20 years to maturity. The annual coupon is $110. Similar bonds have a yield to maturity of 11%. What is the value of Wilhite's bonds?
  2. Suppose the YTM on bonds similar to that of Wilhite Co. is 13% rather than 11%. What is the bond price?
  3. A $1,000 bond with an 8% coupon rate, with the coupons paid semiannually, is maturing in 10 years. If the quoted YTM is 10%, what is the bond price?
  4. What is the price of a $1,000 par value bond with a 6% coupon rate paid semiannually, if the YTM is 5% and it has 9 years to maturity? What would be the price of the bond if the YTM rose to 7%?

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