You must show your work to receive credit! 1. Hogan Inc. wants to issue new 30-year bonds for some much-needed expansion projects. The company has 7.5% coupon bonds on the market that sell for $1,259 ($1,000 par value, semiannual payments) and mature in 30 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? 2. Both Elmers Inc. (EI) and Locktite Corp. (LC) have bonds with a 7% coupon, make semiannual payments, and are priced at par value. The El bonds have 10 years to maturity, whereas the LC bonds have 25 years to maturity. a. If interest rates suddenly rise by 1%, what is the percentage change in the price of the EI bonds? Of the LC bonds? b. If rates were to suddenly fall by 1% instead, what would the percentage change in the price of the El bonds be then? Of the LC bonds? 3. Klink Corp. issued 20-year bonds 3 years ago at a coupon rate of 6.5%. The bonds have a par value of $1,000 and make semiannual payments. If the YTM on these bonds is 6.27%, what is the current bond price?