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7) 7) A S1000 bond with a coupon rate of 5.9% paid semiannually has nine years to maturity and a yield to maturity of 6,6%. If interest rates fall and the yield to maturity decreases by 0.8%, what will happen to the price of the bond? A) The price of the bond will fall by $64.65. B) The price of the bond will rise by $53.87. C) The price of the bond will rise by $75.42. D) The price of the bond will fall by $53.87. 8) A company issues a ten-year $1,000 face value bond at par with a coupon rate of 6.0% paid semiannually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 8.6%. What was the percentage change in the price of the bond over the past two years? A) -14.82% B) -20.75% C) -17.78% D) -11.85% 9) A firm issues two-year bonds with a coupon rate of 6.2%, paid semiannually. The credit spread for this firm's two-year debt is 0.8%. New two-year Treasury notes are being issued at par with a coupon rate of 3.2%. What should the price of the firm's outstanding two-year bonds be per $100 of face value? A) $83.35 B) S104.19 C) $145.86 D) $125.03 10) Coolibah Holdings is expected to pay dividends of $1.10 every six months for the next three years. If the current price of Coolibah stock is $21.80, and Coolibah's equity cost of capital is 14% (APR), what price would you expect Coolibah's stock to sell for at the end of three years? A) $28.58 B) $29.82 C) $24.85 D) $27.34

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