Basic bond valuationComplex Systems has an outstanding issue of $1,000-par-value bonds with a15% coupon interest rate. The issue pays interest annually and has 18years remaining to its maturity date. a.If bonds of similar risk are currently earning a rate of return of 11%, how much should the Complex Systems bond sell for today?

b.Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond. c.If the required return is 15% instead, what would the current value of Complex Systems' bond be? Contrast this finding with your findings in part a and discuss. a.If bonds of similar risk are currently earning a rate of return of 11%, the Complex Systems bond should sell today for$ b.Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond.

A. Since Complex Systems' bonds were issued, there may have been a shift in the supply-demand relationship for money or a change in the risk towards the firm.

B. Since Complex Systems' bonds were issued, there may have been a shift in the supply-demand relationship for their product or a change in the risk towards loans.

C. Since Complex Systems' bonds were issued, there may have been a change in the number of bonds available or a change in the coupon interest rate.

D. Since Complex Systems' bonds were issued, there may have been a change in the supply-demand relationship for money or a shift in the investors' attitudes towards the firm.

c.If the required return were at 15 % instead of 11 %, the current value of Complex Systems' bond would be $

When the required return is equal to the coupon rate, the bond value is___the par value. In contrast in part a above, if the required return is less than the coupon rate, the bond will sell at

a___ (its value will be greater than par).