Calculate the bond’s price based on below specified going market interest rates for bonds with the same bond rating:

FV = EUR 1,000

COUPON RATE = 5%

NPER = 5 (years)

1. What is the bond’s price of a five-year, 5% coupon bond with the market yield (market interest rate) of (1) 1% and (2) 9% and assuming semi-annual coupon payments?

2. For each of the  possible scenarios for the going market interest rate (1%, 5%, and 9%), please provide a recommendation to: 

(1) investor (bond holder) and 

(2) the company (bond issuer) as to whether (1) to keep the bond until maturity or (2) terminate the bond agreement. Please provide your arguments that support your recommendation.