1. Capital Corp. has 6.4 percent coupon bonds on the market. The bonds currently sell for 110 percent of par. What is the current yield on the bonds?
a. 0.64 %
b. 5.82 %
c. 7.04 %
d. 6.40 %
2. Bruin Co. wants to issue a new 10-year bonds to support its expansion plans. The company currently has 10.2 percent coupon bonds on the market that sell for $1,075, make semiannual payments and mature in 10 years. The face value of the bond is $1,000. What approximate coupon rate should the company set on its new bonds if it wants to sell at a par?
a. 9.1 percent
b. 10.6 percent
c. 10.9 percent
d. 8.8 percent
e. 9.9 percent