Bond valuation relationships)A bond of Telink Corporation pays

$110

in annual interest, with a

$1,000

par value. The bonds mature in

15

years. The market's required yield to maturity on a comparable-risk bond is

10

percent.

a.Calculate the value of the bond.

b.How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to

14

percent or (ii) decreases to

4

percent?

c.Interpret your findings in parts a and

b.