Intro BankMart Inc. recently issued bonds that mature in 11 years. They have a par value of $1,000 and an annual coupon of 6%. The current market interest rate is 8%.

Part 1

What is the bond's value?

Problem 14

Intro

One of IBM's bond issues has an annual coupon rate of 3.5%, a face value of $1,000 and matures in 15 years.

Part 1

What is the value of the bond if the required return is 5%?

Part 2

What is the value of the bond if the required return is 6%?