Fix-It Inc. recently issued 10-year, $1,000 par value bonds at an 8% coupon rate. a. Two years

Question:

Fix-It Inc. recently issued 10-year, $1,000 bonds at an 8% rate.
a. Two years later, similar bonds are yielding investors 6%. At what price are Fix-It’s bonds selling?
b. What would the bonds be selling for if yields had risen to 12%?
c. Assume the conditions in part a. Further assume interest rates remain at 6% for the next 8 years. What would happen to the price of the Fix-It bonds over that time?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...