Rapid Line has outstanding a bond issue that will mature to its $1,000 par value in 10 years.

The bond has a coupon interest rate of 12% and pays interest annually.

a) . Find the value of the bond if the required return is (1) 12%, (2) 15%, and (3) 9%.

b. Use your findings in parts a to discuss the relationship between the coupon interest rate on

bond and the required return and the market value of the bond relative to its par value.