A bond of Telink Corporation pays $110 in annual interest, with a $1,000 par value. The bonds mature in 20 years. The market's required yield to maturity on a comparable-risk bond is 9 percent.

a.Calculate the value of the bond. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 9 percent?

b.How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 13 percent or (ii) decreases to 4 percent?

c.Interpret your findings in parts a and

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