Suppose Ford sold an issue of bonds with a15-year maturity, a $1,000 par value, a 12% couponrate, and semiannual interest payments.(a) Two years after the bonds were issued, thegoing rate of interest on bonds such as thesefell to 9%. At what price would the bonds sell?(b) Suppose that, two years after the bonds’ issue,the going interest rate had risen to 13%. At whatprice would the bonds sell?(c) Today, the closing price of the bond is $783.58.What is the effective current yield?

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A: Current price of the bond is the sum of present value of maturity value of bond value and present…

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A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: The Pennington Corporation issued a new series of bonds on January 1, 1979.  The bonds were sold at…

A: 1. given, Pennington Corporation issued a new series of bonds on January 1, 1979 bonds were sold at…

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A: Bond It is the instrument of the indebtedness of a bond issuer to bondholders.

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A: Calculate the yield to maturity (YTM) as follows:MS - Excel --> Formulas --> Financials -->…

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Q: Suppose Hillard Manufacturing sold an issue of bonds with a 12-year maturity, a $1,000 par value, a…

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A: Issue price of bonds refers to the price at which the bonds are actually issued.

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A: Using the present value function in excel

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A: Price of the bond is calculated by discounting all the future cash flows by the discounting rate.…

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Q: pretax

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A: Price of bond =Present value of coupon payment +Present value of par value

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A: A financial instrument that doesn’t affect the ownership of the common shareholders or management of…

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A: Discounting all the remaining future cash flows( Coupon + Principal) provides the present value.

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A: Coupon rate means the yield paid to the investor by fixed-income security. In simple coupon rate is…

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A: The correct option is as fallows

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Q: The Pennington Corporation issued a new series of bonds on January 1, 1987. The bonds were sold at…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…