(Bond Valuation)
1. A corporate bond is quoted at a current price of 102.767. What is the market price of a bond with a $1,000 face value?
2. Your firm offers a 10-year, zero coupon bond. The yield to maturity is 7%. What is the current market price of a $1,000 face value bond?
3. Chocolate and Rum, Inc. offers a 7% coupon bond with semiannual payments and a yield to maturity of 8%. The bonds mature in 9 years. What is the market price of a $1,000 face value bond?
4. The MerryWeather Firm wants to raise $10 million to expand its business. To accomplish this, it plans to sell 30-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 6%. What is the minimum number of bonds it must sell to raise the $10 million it needs?
5. (* 10 optional bonus points ) A corporate bond with a face value of $1,000 matures in 4 years and has an 8% coupon paid at the end of each year. The current price of the bond is $932. What is the yield to maturity for this bond?