Once upon a time, the treasurer of Mighty Corporation (MCO) decided to issue a bond (hereafter: The bond) The bond would have a 20-year life and promised that the holder of the bond would receive:

• 20 annual payments of $80,
• Along with the 20^th payment, MCO promised to return the principal of $1,000. In other words, the final payments received at maturity would be ($1000+$80) = $1080.

The bond is bought by an insurance company. One year passes, the bond has made its first coupon payment, and the interest rate/yield-to-maturity on the bondfalls to 6%.

• A) What is the Coupon Yield on the bond?
• B) The bond now has 19 years left. Calculate the Macaulay duration of the bond. Show your work on the Duration spreadsheet tab. (Do the full calculation, I will not accept an answer from a duration calculator or the duration functions in Excel.)