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Four years ago, Firm A issued a 12 year and a 22 year bond. The bonds each have a coupon rate of 6.25 percent, paid
Four years ago, Firm A issued a 12 year and a 22 year bond. The bonds each have a coupon rate of 6.25 percent, paid semiannually. Assume the yield to maturity on each of these bonds is now 7 percent. What is the percentage change in the price of the 12-year bond since it was issued? The 22-year bond? Assume that both bonds were issued at par four years ago.
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