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P4-17: You have gathered the following data on three bonds: Bond Maturity Coupon% A 10 yrs 9% B 9 yrs 1% C 5 yrs 5%
P4-17: You have gathered the following data on three bonds: Bond Maturity Coupon% A 10 yrs 9% B 9 yrs 1% C 5 yrs 5% A. If the markets required return on all three bonds is 6%, what are the market prices of the bonds (you can assume annual interest payments)? b The market's required return suddenly rises to 7%. What are the new bonds' prices, and what is the percentage change in price for each bond? C. If the market's required return falls from the initial 6% to 5%, what are the new prices, and what is the percentage change in each price relative to the answer obtained in part (a)
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