Twin Oaks Health Center has one outstanding bond issue with a 7% coupon rate and four years remaining to maturity. The par value of the bond is $1000.00 and the bonds pay interest annually.

Determine the present value of the bond if current marker conditions justify a required rate of return of 14%.

Now assume semiannual coupon payments on the Twin Oaks four-year bond. What would its current value be? (Assume a 7% semi-annual required rate of return.) However, the actual rate would be slightly less than 7% because a semi-annual rate of return is required.

Twin has a semi-annual coupon but has 20 years left to maturity. What is the present value under these conditions? Again, assume a semi-annual required rate of return of 7%, although the actual rate is likely to be higher than 7% due to increased price risk.