A $1,000 Ford bond carries a coupon rate of 6%, payable semi-annually and has 24 years until maturity. It has a yield to maturity (YTM /yield rate) of 5%.

1. What will the price be if the bond yield rises to 7%?
2. If a this bond was broken into a "zero coupon bond" and coupons, how much would the zero coupon bond sell for? (assume yield of 5%)
3. If a this bond was broken into a "zero coupon bond" and coupons, how much would the coupons sell for? (assume yield of 5%)
4. If Ford significantly increased the amount of debt on its balance sheet, what would likely happen to the price of the bond in (1)? Explain.
5. Show the percentage change in the value of the "coupons" and the "zero coupon bond". If the yield increases from 5% to 8%.