$11\mathrm{.}2$ Twin Oaks Health Center has a bond issue outstanding with a

coupon rate of $7$ percent and four years remaining until maturity.

The par value of the bond is $$1,000,$ and the bond pays interest

annually.

a$.$ Determine the current value of the bond if present market

conditions justify a $14$ percent required rate of return.

b$.$ Now, suppose Twin Oaks's four$-$year bond had semiannual

coupon payments. What would be its current value? $($Assume a $7$

percent semiannual required rate of return. However, the actual

rate would be slightly less than $7$ percent because a semiannual

coupon bond is slightly less risky than an annual coupon bond.$)$

c$.$ Assume that Twin Oaks's bond had a semiannual coupon

but $20$ years remaining to maturity. What is the current value

under these conditions? $($Again$,$ assume a $7$ percent semiannual

required rate of return, although the actual rate would probably

be greater than $7$ percent because of increased price risk.$)$