On April $1,2014,$ Fredriksen Corp. sold a $$700$ million bond issue to finance the purchase of a new distribution facility. These bonds were issued in $$1,000$ denominations with a maturity date of April $1,2034.$ The bonds have a coupon rate of $8\mathrm{.}00\%$ with interest paid semiannually.

Required:

a$)$ Determine the value today April $1,2024$ of one of these bonds to an investor who requires a $12$ percent return on these bonds. Why is the value today different from the par value?

b$)$ Assume that the bonds are selling for $$925\mathrm{.}00.$ Determine the current yield and the yield$-$to$-$maturity. Explain what these terms mean.

c$)$ Explain what layers or textures of risk play a role in the determination of the required rate of return on Fredriksen's bonds.