1. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 14 years to maturity, and a coupon rate of 7 percent paid annually. If the yield to maturity is 10 percent, what is the current price of the bond?
2. Weismann Co. issued 14-year bonds a year ago at a coupon rate of 11 percent. The bonds make semiannual payments and have a par value of $1,000. If the YTM on these bonds is 11 percent, what is the current bond price?
3. McConnell Corporation has bonds on the market with 14 years to maturity, a YTM of 9.0 percent, a par value of $1,000, and a current price of $1,336.50. The bonds make semiannual payments. What must the coupon rate be on these bonds?
4. Chamberlain Co. wants to issue new 16-year bonds for some much-needed expansion projects. The company currently has 11.8 percent coupon bonds on the market that sell for $1,029.13, make semiannual payments, and mature in 16 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000. Get Finance Help Today
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