Financial Management

Complete the following problems, making sure to show/explain your work:

1. Yest Construction Company's bonds currently sell for $1,065. They have an 8-year maturity, an annual coupon of $70, and a par value of $1,000. What is their yield to maturity? 
   
   
2. A company has 8% semiannual payment bonds that mature in 14 years and have a par value of $1,000. The market yield on the bonds is currently 8%.
• What is the price of these bonds?
• What is the price of these bonds if it pays annually instead of semiannual as stated above? 
  
  
3. Malko Enterprises’ bonds currently sell for $900. They have a 6-year maturity, an annual coupon of $90, and a par value of $1,000.
• What is their current yield?
• Capital gain yield?
• YTM? 
  
  
4. O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 20 years. Their nominal yield to maturity is 9%, they pay interest annually, and they sell at a price of $950. What is the bond's nominal coupon interest rate? 
   
   
5. Grossnickle Corporation issued 20-year, noncallable, 9.5% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 6.5%. What is the current price of the bonds?