A corporate bond has 22 years to maturity, a face value of $1,000, a coupon rate of 5.3% and pays interest twice a year. The annual market interest rate for similar bonds is 3.4%.

Part 1

What is the value of the bond (in $)?

2..One of IBM's bond issues has an annual coupon rate of 4.2%, a face value of $1,000 and matures in 14 years.

What is the value of the bond if the required return is 6%?