24. Cox Media Corporation pays an 11 percent coupon rate on debentures that are due in...

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24. Cox Media Corporation pays an 11 percent coupon rate on debentures that are due in 10 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,110. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. a. Find the market value of the bonds using semiannual analysis. (2) b. Do you think the bonds will sell for the price you arrived at in part a? Why? (2) 25. An investor must choose between two bonds: Bond A pays $72 annual interest and has a market value of $925. It has 10 years to maturity. Bond B pays $62 annual interest and has a market value of $910. It has two years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. (2) b. Which bond should she select based on your answer to part a? (2) c. A drawback of current yield is that it does not consider the total life of the bond. For example, the yield to maturity on Bond A is 8.33 percent. What is the yield to maturity on Bond B? (2) d. Has your answer changed between parts b and c of this question in terms of which bond to select? (Explain Why?) (2) 24. Cox Media Corporation pays an 11 percent coupon rate on debentures that are due in 10 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1,110. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. a. Find the market value of the bonds using semiannual analysis. (2) b. Do you think the bonds will sell for the price you arrived at in part a? Why? (2) 25. An investor must choose between two bonds: Bond A pays $72 annual interest and has a market value of $925. It has 10 years to maturity. Bond B pays $62 annual interest and has a market value of $910. It has two years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. (2) b. Which bond should she select based on your answer to part a? (2) c. A drawback of current yield is that it does not consider the total life of the bond. For example, the yield to maturity on Bond A is 8.33 percent. What is the yield to maturity on Bond B? (2) d. Has your answer changed between parts b and c of this question in terms of which bond to select? (Explain Why?) (2)