Question
Bond A Bond B Maturity (years) 20 30 Coupon rate (%) 12 8 Par value 1000 10000 (a) If both bonds had a required rate
Bond A Bond B Maturity (years) 20 30 Coupon rate (%) 12 8 Par value 1000 10000 (a) If both bonds had a required rate of return of 10%, what would the bonds' prices be? b) Re-calculate the prices of the bonds if the required return falls to 9%. Could you explain why the price increases or decreases given this change in required return?
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
15th edition
134796551, 134796550, 978-0134796550
