You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 11 percent, which is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. There are 15 years to maturity. Use Arpendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the price of the bonds based on semiannual analysis. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Bond price b. With 10 years to maturity, if yield to maturity goes down substantially to 10 percent, what will be the new price of the bonds? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) New bond price Keyspan corp. is planning to issue debt that will mature in 2033. In many respects, the issue is similar to the currently outstanding debt of the corporation. Use Table 11-3. a. Calculate the yield to maturity on similarly outstanding debt for the firm in terms of maturity. (Input your answer as a percent rounded to 2 decimal places.) Answer is complete and correct. Yield 4.25 % a Assume that because the new debt will be issued at par, the required yield to maturity will be 0.25 percent higher than the value determined in part a. b. What is the new yield to maturity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Yield 4.37 % c. If the firm is in a 25 percent tax bracket, what is the aftertax cost of debt for the yield determined in part b? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Aftertax cost of debt 3.28 % You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 11 percent, which is paid semiannually. The yield to maturity on the bonds is 14 percent annual interest. There are 15 years to maturity. Use Arpendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the price of the bonds based on semiannual analysis. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Bond price b. With 10 years to maturity, if yield to maturity goes down substantially to 10 percent, what will be the new price of the bonds? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) New bond price Keyspan corp. is planning to issue debt that will mature in 2033. In many respects, the issue is similar to the currently outstanding debt of the corporation. Use Table 11-3. a. Calculate the yield to maturity on similarly outstanding debt for the firm in terms of maturity. (Input your answer as a percent rounded to 2 decimal places.) Answer is complete and correct. Yield 4.25 % a Assume that because the new debt will be issued at par, the required yield to maturity will be 0.25 percent higher than the value determined in part a. b. What is the new yield to maturity? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Yield 4.37 % c. If the firm is in a 25 percent tax bracket, what is the aftertax cost of debt for the yield determined in part b? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. Aftertax cost of debt 3.28 %