40.Potemkin Corporation plans to raise $10,000,000 in funds by issuing zero coupon $1,000 par value bonds with a 25 year maturity.Potemkin Corporation is able to issue these bonds at an after tax cost of debt of 12%.To the nearest whole number,how many bonds must Potemkin Corporation issue? (a)10,000 bonds (b)42,919 bonds (c)125,837 bonds (d)170,000 bonds Answer:(d) 41.Calculate the years to maturity for a bond based on the following information.The bond trades at $950,it has a par value of $1,000,a coupon rate of 11%,and a required rate of return of 12%. (a)8 years (b)12 years (c)15 years (d)16 years Answer:(a) 42.Compute the current price of Walsingham bonds based on the following information.Walsingham bonds have a $1,000 par value,have 20 years remaining until maturity,a 12 percent coupon rate,and a yield to maturity of 10.5 percent. (a)$858.42 (b)$982.47 (c)$1,119.52 (d)$1,124.41 Answer:(d) 43.Compute the yield to maturity of Arundel bonds based on the following information.Arundel bonds have a $1,000 par value,25 years remaining until maturity,an 11%coupon rate,and a current market price of $1,187. (a)4.55% (b)9.08% (c)9.27% (d)13.17% Answer:(b) 8-118-11 40. Potemkin Corporation plans to raise $10,000,000 in funds by issuing zero coupon $1,000 par value bonds with a 25 year maturity. Potemkin Corporation is able to issue these bonds at an after tax cost of debt of 12%. To the nearest whole number, how many bonds must Potemkin Corporation issue? (a) 10,000 bonds (b) 42,919 bonds (c) 125,837 bonds (d) 170,000 bonds Answer: (d) 41. Calculate the years to maturity for a bond based on the following information. The bond trades at $950, it has a par value of $1,000, a coupon rate of 11%, and a required rate of return of 12%. (a) 8 years (b) 12 years (c) 15 years (d) 16 years Answer: (a) 42. Compute the current price of Walsingham bonds based on the following information. Walsingham bonds have a $1,000 par value, have 20 years remaining until maturity, a 12 percent coupon rate, and a yield to maturity of 10.5 percent. (a) $858.42 (b) $982.47 (c) $1,119.52 (d) $1,124.41 Answer: (d) 43. Compute the yield to maturity of Arundel bonds based on the following information. Arundel bonds have a $1,000 par value, 25 years remaining until maturity, an 11% coupon rate, and a current market price of $1,187. (a) 4.55% (b) 9.08% (c) 9.27% (d) 13.17% Answer: (b)