Q19 BDJ Co. wants to issue new 25-year bonds for some much-needed expansion projects. The company currently has 7.8 percent coupon bonds on the market that sell for $1,125, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

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Absalom Energy's 8% coupon rate, semiannual payment, $1,000 par value bonds that mature in 20 years are callable 6 years from now at a price of $1,025. The bonds sell at a price of $1,255.60, and the yield curve is flat. Assuming that interest rates in the economy are expected to remain at their current level, what is the best estimate of the nominal interest rate on new bonds issued in 6 years? Do not round intermediate calculations. Round your answer to two decimal places. %

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Imagination Dragons Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 20-year zero coupon bonds with a par value of $1,000 each to raise the money. The required return on the bonds will be 8 percent. Assume semiannual compounding periods. a. What will these bonds sell for at issuance? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Using the IRS amortization rule, what interest deduction can the company take on these bonds in the first year? In the last year? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. Repeat part (b) using the straight-line method for the interest deduction. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. b. C. Issue price First year interest deduction Last year interest deduction Interest deduction $ $ 208.29 39.58

Text Problem 22 (p.241) Bond Yields: Uliana Co. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6% coupon bonds on the market with a par value of $1,000 that sell for $967, make semiannual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? .

5 2 Chamberlain Company wants to issue new 18-year bonds for some much-needed expansion projects. The company currently has 9.8 percent coupon bonds on the market that sell for $865.21, make semiannual payments, and mature in 18 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000.

Finance Consider a zero-coupon bond that will pay the face value of $1,000 in September 2023. In September 2021, we enter a long position in a forward contract on the zero-coupon bond. The forward will expire one year from now, and the forward price is $980. Suppose that a year later, in September 2022, the term structure turns out to be as follows: Maturity (years) Spot rate (% per annum) (continuous compounding) 1 5% 2 6% What is the payoff for the long position in the forward?