Chapter 6 problems 1. One More Time Software has 9.2% coupon bonds on the market with 9 years to maturity.

The bonds make semiannual payments and currently sell for 106.8% of par. What is the current yield on the bonds? The YTM? 2. Seether Co. wants to issue new 20-year bonds for some much needed expansion projects. The company currently has 8% coupon bonds on the market that sell for $930, 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? 3. Suppose your company needs to raise $30 million and you want to issue 30year bonds for this purpose. Assume the required return on your bond issue will be 8%, and youre evaluating two issue alternatives: an 8% semiannual coupon bond and a zero coupon bond. Your companys tax rate is 35%. a. How many of the coupon bonds would you need to issue to raise the $30 million? How many of the zeroes would you need to issue? b. In 30 years, what will your companys repayment be if you issue the coupon bonds? What if you issue the zeroes? 4. Ngata Corp. issued 12-year bonds 2 years ago at a coupon rate of 8.4%. The bonds make semiannual payments. If these bonds currently sell for 105% of par value, what is the YTM?