A bond of Visador Corporation pays $90 in annual interest, with a $1,000 par value. The bonds mature in 25 years. The market's required yield to maturity on a comparable-risk bond is 8.5 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 8.5 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 finding in parts a and b.