Givens

1. Par Value$5,000
2. Market rate (k)8%
3. Time horizon in years (n)20
4. Coupon rate8%
5. Coupon Payment$400

1. Hospital A plan to issue a tax-exempt bond at an annual coupon rate of 6 percent with a maturity rate of 20 years. The par value of the bond is $1,000.
2. If required market rates are 5 percent, what is the value of the bond?
3. If required market rates fall to 10 percent, what is the value of the bond?
4. A $1,000 par value bond with an annual 12 percent coupon rate will mature in 15 years. Coupon payments are made semiannually. What is the market price if the required annual market rate is 10 percent?