Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Bond A Bond B Coupon rate 3.75% 3.75% Time to maturity 5 years 25 years Required return 6.35% 6.35%

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 7.70%. (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 $