need the answer to Q8. Will rate good :)

7. assumption of semiannual interest payments, a. Compute the price of a bond. b. Compute the total value of the 90 bonds. Pacific Western Corporation pays a 12 percent coupon rate on debentures due in 25 years. The current yield to maturity on bonds of similar risk is 10 percent. The Bonds are currently callable at $1,060. The theoretical value of the bonds will be equal to the present value of the expected cash flow from the bonds. This is the normal definition we use. a. Find the theoretical market value of the bonds using semiannual analysis, b. Do you think the bonds will sell for the price you arrived at in part a? Why? The yield to maturity for 15-year bonds is as follows for four different bond rating categories. 8. 8 6.4% AAA AA A BBB 7.0% 7.2 6.6 9. The bonds of Falter Corporation were rated as AA and issued at par a few weeks ago. The bonds have just been downgraded to A. Determine the new price of the bonds, assuming a 15-year maturity and semiannual interest payments. The 20-year A-rated bonds of Polly Cracker Company were initially issued at a 10 percent yield (paid semiannually). After 5 years, the bonds have been upgraded to AA. Such bonds are currently yielding 8 percent (semiannual com pounding). Determine the price of a Polly Cracker bond. A previously issued, A-rated 20-year industrial bond provides a return one-fourth higher than the prime interest rate of 9 percent. Previously issued public utility bonds provide a yield of one-half of a percentage point higher than previously 10. icauad