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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 14 percent or (ii) decreases to 4 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 10 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 14 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 4 percent? (Round to the nearest cent.) by contrast, an increase in interest rates will cause the value to . (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 and is less than the bond's coupon rate, the bond will sell at (Select from the drop-down menus.)
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