The Wedderburn Manufacturing Co. has a series of $1000 par value bonds outstanding that began January 1, 2010. Each bond pays interest semi-annually and carries an annual coupon rate of 7%. Some bonds are due in three years while others are due in 10 years. If the required rate of return on bonds is 10%.

a) What is the current price of the bonds with 3 years to maturity? (4 marks)

b) What is the current price of the bonds with 10 years to maturity (4 marks)

c) How much would you pay for each bond on July 1, 2012. (10 marks)

d) Fullerton Company's bonds are currently selling for $1, 157.75 per $1000 par-value bond. The bonds have a 10% coupon rate payable annually and will mature in 10 years. What is the approximate yield to maturity? (7 marks)