Island Telephone Corporation issued a $240,000 face value bond on March 21, 1989, carrying a 9.25% coupon and 25 years to maturity. Global Financial Services purchased the bond on March 21, 1996, at which point the market rate was 8.25%, and sold it on September 21, 2008, for $307,186.03 when market rates were 4.9%. What yield did Global Financial Services realize on its investment? Number 4

Occam Industrial Machines issued 188,000 zero coupon bonds 8 years ago. The bonds originally had 30 years to maturity with a yield to maturity of 6.6 percent. Interest rates have recently decreased, and the bonds now have a yield to maturity of 5.7 percent. The bonds have a par value of $2,000 and semiannual compounding. If the company has a $89 million market value of equity, what weight should it use for debt when calculating the cost of capital? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.

Grossnickle Corporation issued 20-year, noncallable, 8.0% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 6.0%. What is the current price of the bonds, given that they now have 19 years to maturity?   a. $1,235.28     b. $1,229.40     c. $1,223.16     d. $1,276.72     e. $1,284.45

5. A securities firm has provided the balance sheet below. Assets ($ millions) $ 34 Liabilities and Equity ($ millions) Short-term funding Cash $ 27 Debt securities 175 Bonds 300 Equity securities 400 Debentures 197 Other assets 12 Equity 97 Total Assets $ 621 Total Liabilities and Equity $ 621 The debt securities have an annual 7.25% coupon rate, 22 years to maturity and a yield to maturity of 6.75%. The market value of the equity securities and the other assets is equal to their book value. The firm has 500,000 shares outstanding and the price per share is $35.67. a. Calculate the firm's aggregate indebtedness to net capital ratio. b. Calculate the firm's highly liquid assets to total liabilities ratio. Based on the firm's ratios from a and b, is it in compliance with Rule 15C 3-1? Why or why not? C.

Occam Industrial Machines issued 145,000 zero coupon bonds six years ago. The bonds have a par value of $1,000 and originally had 30 years to maturity with a yield to maturity of 7 percent. Interest rates have recently increased, and the bonds now have a yield to maturity of 8.1 percent. Assume semiannual compounding for the bonds. What is the dollar price of the bonds? What is the market value of the company's debt? If the company has a $46 million market value of equity, what weight should it use for debt when calculating the cost of capital?