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Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Bond A Bond B Coupon rate 4.50% 4.50%

Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Bond A Bond B Coupon rate 4.50% 4.50% Time to maturity 5 years 25 years Required return 6.86% 6.86% a. Calculate the values of Bond A and Bond B. (Round your answers to 2 decimal places.) Bond value A $ Bond value B $ b. Recalculate the bonds values if the required rate of return changes to 8.72%. (Round your answers to 2 decimal places.) Bond value A $ Bond value B $ c. Calculate the increase or decrease in bond value based on the change in required return. (Round your answers to 2 decimal places.) Bond value A $ Bond value B $

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