1. Savannah Cruise Lines issued bonds five years ago with par $1000 and a 25 year life when issued. At that time the coupon rate was 15%. Now five years later the current market rate for these bonds is only 12%. What should you pay for the bonds now?
2. Heather wants to buy a bond. The bond she is looking at has a par value of $1,000 with an annual coupon rate of 11%. There are 10 years to maturity. The current market yield to maturity for these bonds is 14% annually. If the coupon is paid twice a year (semi-annually) what should she pay for this Bond?