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Understanding that the yearly coupon payment (C) in the below equation is fixed and equal to the Annual Coupon Rate (CR) times the Face Value
Understanding that the yearly coupon payment (C) in the below equation is fixed and equal to the Annual Coupon Rate (CR) times the Face Value (F), we can conclude that a change in a bond's required return (i) would have (inverse or a positive) relationship with the bond's price. In other words, should a bond's required return (i) increase -- due perhaps to higher market interest rates or perceived firm risk, the bond's market price (P) should (decrease or increase).
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