1.Hanover County Hospital plans to issue a tax-exempt bond at an annual coupon rate of 6 percent with a maturity of 20 years. The par value of the bond is $1,000. (Hint: See Appendix G)

a)If required market rates are 6 percent, what is the value of the bond?

b)If required market rates fall to 3 percent, what is the value of the bond?

c)If required market rates change to 10 percent, what is the value of the bond?

d)At what required market rate (6 percent, 3 percent, or 10 percent) does the above bond sell at a discount? At a premium?