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Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 12 percent, has a YTM of 10 percent, and has
Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 12 percent, has a YTM of 10 percent, and has 12 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond pays a coupon of 10 percent, has a YTM of 12 percent, and also has 12 years to maturity. Both bonds have a par value of $1,000. What is the price of each bond today? If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 3 years? In 8 years? In 10 years? In 12 years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Miller Corporation Bond Modigliani Company Bond 1,137.99S 1,018.59 xS 874.50 Price today 981.67 year 1,050.76 X S 950.83 3 years 1,108.38 8 years 898.94 885.30 1,124.62 x S 10 years 1,138 S 12 years 875
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