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Just need to answer part c, thanks. Suppose Hillard Manufacturing sold an issue of bonds with a 10 -year maturity, a $1,000 par value, a
Just need to answer part c, thanks.
Suppose Hillard Manufacturing sold an issue of bonds with a 10 -year maturity, a \$1,000 par value, a 7% coupon rate, and semiannual interest payments. a. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 5%. At what price would the bonds sell? b. Suppose that, 2 years after the initial offering, the going interest rate had risen to 9%. At what price would the bonds sell? c. Suppose that 2 years after the issue date (as in part a) interest rates fell to 5\%. Suppose further that the interest rate remained at 5% for the next 8 years. What would happen to the price of the bonds over timeStep by Step Solution
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