1)Calculate the value of a bond that matures in18 years and has a $1,000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 14 percent.

Part 1

The value of the bond is ______

2) Enterprise, Inc. bonds have an annual coupon rate of 12 percent. The interest is paid semiannually and the bonds mature in 9 years. Their par value is $1,000. If the market's required yield to maturity on a comparable-risk bond is 16 percent, what is the value of the bond? What is its value if the interest is paid annually?

Part 1

a. The value of the Enterprise bonds if the interest is paid semiannually is ______