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i just need #3 plz The Rowan Corp has two bond issues outstanding. Both bonds pay $90 annual interest plus $1,000 at maturity. Bond 1
i just need #3 plz
The Rowan Corp has two bond issues outstanding. Both bonds pay $90 annual interest plus $1,000 at maturity. Bond 1 has a maturity of 30 years, and Bond 2 has a maturity of 5 year. 1. Calculate the value of the bonds: a) When the going rate of interest is 5%,9%,15%, and 20%. b) Using Microsoft Excel's relevant functions, calculate the bond prices. Create a table to summarize your results. c) Please mark the bonds as "Discount Bonds", "At-Par Bonds", and "Premium Bonds" for your answers. With 5\%: Bond 1: Bond 2: N=30,1/YR=5,PMT=90,FV=1000,PV=$1,618.17N=5,1/YR=5,PMT=90,FV=1000,PV=$1,175.04 With 9\%: Bond 1: N=30,1/YR=10,PMT=90,FV=1000,PV=$1,000.00N=5,1/YR=10,PMT=90,FV=1000,PV=$1,000.00 Bond 2: With 15\%: Bond 1: N=30,1/YR=15,PMT=90,FV=1000,PV=$605.22N=5,I/YR=15,PMT=90,FV=1000,PV=$794.08 With 20\%: Bond 1: N=30,1/YR=20,PMT=90,FV=1000,PV=$451.81N=5,1/YR=20,PMT=90,FV=1000,PV=$662.05 2. Prepare a graph displaying your results. Make sure both bonds are displayed on one graph. Make the x-axis interest rate and y-axis bond prices. 3. Comment on which bond has more Interest Rate Risk, include a discussion of the shape of the two curves in Part-2. 4. Prepare a graph displaying the value of each bond over time, for market interest rate of 4%,9%, and 13%. Make the x-axis years and y-axis bond prices. There should be six lines on the graph, representing the value of Bond 1 at three different rates and the value of Bond 2 at three different rates Step by Step Solution
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