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The Bensington Glass Company entered into a loan agreement with thefirm’s bank to finance the firm’s working capital. The loan called for a floating rate that was 29 basis points (0.29 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.15 percent and minimum of 1.72 percent.

3. The market price is $725 for a 19?-year bond ($1,000 par? value) that pays 12 percent annual? interest, but makes interest payments on a semiannual basis (6 percent? semiannually). What is the? bond’s yield to? maturity?

4. ?Pybus, Inc. is considering issuing bonds that will mature in 20 years with an annual coupon rate of 11 percent. Their par value will be ?$1,000?, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds? and, if it? does, the yield to maturity on similar AA bonds is 9 percent. ? However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A? rating, the yield to maturity on similar A bonds is 10 percent. What will be the price of these bonds if they receive either an A or a AA? rating?