Business, 07.04.2020 01:26 emmmmmily997
Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds.
Bond A Bond B
Coupon rate 5.00% 5.00%
Time to maturity 5 years 25 years
Required return 7.37% 7.37%
a. Calculate the values of Bond A and Bond B. (Round your answers to 2 decimal places.)
b. Recalculate the bonds’ values if the required rate of return changes to 9.40%. (Round your answers to 2 decimal places.)
c. Calculate the increase or decrease in bond value based on the change in required return. (Round your answers to 2 decimal places.)
Answers: 1
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Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bon...
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