Question
Question 1: What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required return is 11.9%? Question
Question 1: What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required return is 11.9%?
Question 2:
a) What is the value of a 13% coupon bond that is otherwise identical to the bond described in part A? Would we now have a discount or a premium bond? b) What is the value of a 7% coupon bond with these characteristics? Would we now have a discount or a premium bond?
c) What would happen to the values of the 7%, 10%, and 13% coupon bonds over time if the required return remained at 11.9%?
***please show the formulas and answers in excel
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