Question
Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 10 percent, has a YTM of 8 percent, and has
Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 10 percent, has a YTM of 8 percent, and has 16 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond pays a coupon of 8 percent, has a YTM of 10 percent, and also has 16 years to maturity. What is the price of each bond today? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Price of Miller Corporation bond $ Price of Modigliani Company bond $ If interest rates remain unchanged, what do you expect the price of these bonds to be In 11 years? In 15 years? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
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