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a. Calculate the value of the bond. b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i)
a. Calculate the value of the bond. 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 5 percent? c. Interpret your findings in parts a and b. a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 9 percent? (Round to the nearest cent.) b. (i) What is the value of the bond if the market's required yield to maturity on a comparable risk bond increases to 13 percent? (Round to the nearest cent.) b. (ii) What is the value of the bond if the market's required yield to maturity on a comparable risk bond decreases to 5 percent? (Round to the nearest cent.) (Select from the drop-down menus.) Also, based on the answers in part b, if the yield to maturity (current interest rate): equals the coupon interest rate, the bond will sell at exceeds the bond's coupon rate, the bond will sell at L and is less than the bond's coupon rate, the bond will sell at . (Select from the drop-down menus.)
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