1) Moon Software Inc. is planning to issue two types of 25-year, noncallable bonds to raise a total of $6 million, $3 million from each type of bond. First, 3,000 bonds with a 10% semiannual coupon will be sold at their $1,000 par value to raise $3,000,000. These are called "par" bonds. Second, Original Issue Discount (OID) bonds, also with a 25-year maturity and a $1,000 par value, will be sold, but these bonds will have a semiannual coupon of only 6.75%. The OID bonds must be offered at below par in order to provide investors with the same effective yield as the par bonds. How many OID bonds must the firm issue to raise $3,000,000? Disregard flotation costs, and round your final answer up to a whole number of bonds. Do not round your intermediate calculations.

2) Assume that you are considering the purchase of a 15-year, noncallable bond with an annual coupon rate of 9.1%. The bond has a face value of $1,000, and it makes semiannual interest payments. If you require an 8.7% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for the bond?

3) Taussig Corp.'s bonds currently sell for $975. They have a 5.75% annual coupon rate and a 25-year maturity, but they can be called in 5 years at $1,085.50. Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what rate of return should an investor expect to earn if he or she purchases these bonds?

4) A 15-year, $1,000 par value bond has a 6.5% annual payment coupon. The bond currently sells for $965. If the yield to maturity remains at its current rate, what will the price be 6 years from now? Do not round your intermediate calculations.

5) Moerdyk Corporation's bonds have a 15-year maturity, an 8.25% semiannual coupon, and a par value of $1,000. The going interest rate (r_d) is 6.00%, based on semiannual compounding. What is the bond's price?