Following is a price quote for $200 million of 6.55% coupon bonds issued by Deere & Company that mature in October 2028:

This quote indicates that, on this day, Deere's bonds have a market price of 123.962 ( 123.962% of face value). resulting in a yield of 4.178%.

a. Assuming that these bonds were originally issued al or close to par value, what does the above market price reveal about the direction that interest rates have changed since Deere issued its bonds? (Assume that Deere's debt rating has remained the same.)

b. Does the change in interest rates since the issuance of these bonds affect the amount of interest expense that Deere is reporting in its income statement'! Explain.

c. If Deere were to repurchase its bonds at the above market price of 123.962, how would the repurchase affect its current income'? Assume that the bonds were issued at face value (100).

d. Assuming that the bonds remain outstanding until their maturity, at what market price will the bonds sell on their due date of October1, 2028?

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RatingsAndustry Issue/Call Information Coupon/Maturity Price/YTM A2/A. Deere & Company... Non Callable, NYBE, DE 6.550 123.962 Industrial. 10-01-2028 4.178 ...