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3. A corporate bond matures in 14 years. The bond has an 8 percent semiannual coupon and a par value of $1,000. The bond is callable in five years at a call price of $1,050. The price of the bond today is $1,075. What is the bond’s yield to maturity? Use the following information to answer the next two questions. Green Grocers is deciding among two mutually exclusive projects. The two projects have the following cash flows: Project A Project B Year Cash Flow Cash Flow 0 -$50,000 -$30,000 1 10,000 6,000 2 15,000 12,000 3 40,000 18,000 4 20,000 12,000 The company’s cost of capital is 10 percent.
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