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Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Coupon rate Time to maturity Required return Bond
Assume that coupon interest payments are made semiannually and that par value is $1,000 for both bonds. Coupon rate Time to maturity Required return Bond A 4.75% 5 years 7.03% Bond B 4.75% 25 years 7.03% 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 9.06%. (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 (Click to select)) Bond value B ((Click to select))
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