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