Question 6Bond P is a premium bond with a 16 percent coupon. Bond D is a 10 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 12 percent, and have 10 years to maturity. The current yield for Bonds P and D isIf interest rates remain unchanged, the expected capital gains yield over the next year for Bonds P and D isQuestion 7The McKeegan Corporation has two different bonds currently outstanding. Bond M has a face value of $17,500 and matures in 18 years. The bond makes no payments for the first 5 years, then pays $1,100 every six months over the subsequent 8 years, and finally pays $1,400 every six months over the last 5 years. Bond N also has a face value of $17,500 and a maturity of 18 years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is 10 percent compounded semiannually, the current price of Bonds M and N is $
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