Question
Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 10 percent, a YTM of 8 percent, and 16
Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of 10 percent, a YTM of 8 percent, and 16 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond has a coupon rate of 8 percent, 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. Round your answers to 2 decimal places (e.g., 32.16).) |
Price of Miller bond | $ |
Price of Modigliani bond | $ |
If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now? In 7 years? In 11 years? In 15 years? In 16 years? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
Price of bond in: | Miller bond | Modigliani bond |
1 year | $ | $ |
7 years | $ | $ |
11 years | $ | $ |
15 years | $ | $ |
16 years | $ | $ |
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