Engineering homework help
1. A company currently has three bond issues outstanding. The appropriate discount rate for each is 9% and all bonds have a par value of $1,000. Assume coupons are paid annually, and that they are not callable. What is the current price of each bond? A. 5-year bond with a 6.5% coupon B. 25-year bond with a 6.5% coupon C. 16-year zero coupon bond2. A 6-year, $1000 par value bond pays an 8% coupon annually. Your required return for this bond is 5.5% What is the current price of this bond if… A. You expect the bond not to be called early? B. You expect the bond to be called early after three years with no penalty? C. You expect the bond to be called early after three years, and the company must pay an extra annual coupon payment at the time of calling as a penalty?