Media Bias incorporated issuectbonds $10$ years ago at $$1,000$ per bond. These bonds had a $25-$year life when issued and the annual

interest payment was then $10$ percent. This retum was in line with the required returns by bondholders at that point in time as

described below:

Assume that $10$ years tater, due to good publicity, the risk premium is now $2$ percent and is appropriately reflected in the required

return $($or yield to maturity$)$ of the bonds. The bonds have $15$ years remaining until maturity.

Compute the new price of the bond. Use ARpendix $B$ and A pendix $D$ for an approximate answer but calculate your final answer using

the formula and financial calculator methods

Note: Do not round intermediate calculotions. Round your final onswer to $2$ decimal places. Assume interest payments are annual.

Answer is complete but not entirely correct.