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Assume the following information for an existing bond that provides annual coupon payments: Par value = $1,000 Coupon rate = 6% Maturity = 5 years

  1. Assume the following information for an existing bond that provides annual coupon payments:

Par value = $1,000

Coupon rate = 6%

Maturity = 5 years

Required rate of return for investors = 6%

  1. What is the present value of the bond?
  2. If the required rate of return by investors was 8% instead of 6%, what would be the present value of the bond?

  1. If the required rate of return by investors was 4%, what would be the present value of the bond?

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