Your boss has indicated that he would like your help in determining the amount of a bond issue currently under review.

The firm has bonds outstanding that have four years remaining to maturity, a coupon interest rate of 9% paid annually, and $1000 dollars par value.

a) What is the yield to maturity on the bond issue of the current market price is $829 dollars?

b) What is the yield to maturity on the bond issue if the current market price is $1104 dollars?

c) Would you be willing to buy one of these bonds for $829. dollars if you required a 12% rate of return on the bond issue? Explain.