Bonds and Analysis

The Garcia Company's bonds have a face value of $1,000, will mature in ten years, and carry a coupon rate of 16 percent. Assuming that the interest payments are made semi-annually, answer the following:

a. Determine the present value of the bond's cash flows if the required rate of return is 16.64 percent.

b. How would your answer change if the required rate of return is 12.36 percent?