. Bright and Beautiful (B & B) Company issued a 25-year bond 5 years ago with a face value of $1,000. The bond pays interest semiannually at a 10% annual rate.

a. What is the bond's price today if the interest rate on comparable new issues is 12%?

b. What is the price today if the interest rate is 8%?

c. Explain the results of parts a and b in terms of opportunities available to investors.

d. What is the price today if the interest rate is 10%?

e. Comment on the answer to part d.