USE BA II PLUS FUNCTIONS TO SHOW WORK

Question 1 - Bond valuation with annual coupon payments [2 points]: Rick bought a bond when it was issued by Macroflex Corporation 14 years ago. The bond, which has a $1,000 face value and a 10% coupon rate, matures in six years. Interest is paid annually; the next interest payment is scheduled for one year from today. If the yield on similar risk investments is 12 percent, what is the current market value (price) of the bond?

Question 2 - Bond valuation with semi-annual coupon payments [2 points]: You intend to purchase a 10-year, $1,000 face value bond with a coupon rate of 12%, paid semiannually. If your required rate of return is 10 percent, how much should you be willing to pay for this bond?

Question 3 Preferred Stock Valuation [2 points]: Many years ago, Minnow Bait and Tackle issued preferred stock. The stock pays an annual dividend equal to $6. If the required rate of return on similar risk investments is 8 percent, what should be the market value of Minnows preferred stock?