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Ougation 9: Suppose that 5 years ago CSL Limited sold a 15-year bond issue that had a $1000 par value and a 7 per cent
Ougation 9: Suppose that 5 years ago CSL Limited sold a 15-year bond issue that had a $1000 par value and a 7 per cent coupon rate. Interest is paid semi-annually. a. If the going interest rate has risen to 10 per cent, at what price would the bonds sell today? b. Suppose that the interest rate remained at 10 per cent for the next 10 years. What would happen to the price of the CSL Limited bonds over time
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