Refer to the information in QS 14-14 for Vodafone Group Plc. The following price quotes (from Yahoo! Finance Bond Center) relate to its bonds payable as of late 2009. For example, the price quote indicates that the 4.625% bonds have a market price of 98.0 (98.0% of par value), resulting in a yield to maturity of 4.899%.

a. Assuming that the 4.625% bonds were originally issued at par value, what does the market price reveal about interest rate changes since bond issuance? (Assume that Vodafone€™s credit rating has remained the same.)
b. Does the change in market rates since the issuance of these bonds affect the amount of interest expense reported on Vodafone€™s income statement? Explain.
c. How much cash would Vodafone need to pay to repurchase the 4.625% bonds at the quoted market price of 98.0? (Assume no interest is owed when the bonds are repurchased.)
d. Assuming that the 4.625% bonds remain outstanding until maturity, at what market price will the bonds sell on the due date in2018?

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Price Contract Rate (coupon) Maturity Date Market Rate (YTM) 98.0 4.625% I5-Jul-2018 4.899%