1)Petty Productions Inc. recently issued 30-year $1000 face value 12% annual coupon bonds.
The market discount rate for this bond is only 7%. What is the current price of this bond
2)Five years ago Thompson Tarps Inc. issued twenty-five-year 10% annual coupon bonds with a $1000 face value each. Since then interest rates in general have risen and the yield to
maturity on the Thompson bonds is now 12%. Given this information what is the price today for a Thompson Tarps bond?
3)Phillips Fine Fixtures Inc. wishes to issue new bonds but is uncertain how the market would set the yield
to maturity. The bonds would be 20-year 7% annual coupon bonds with a $1000 par value. Fisher has determined
that these bonds would sell for $1050 each. What is the yield to maturity for these bonds?