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You have a bond with a maturity value of $ 6 0 0 0 , a coupon rate of 5 % , and an expiration
You have a bond with a maturity value of $ a coupon rate of and an expiration date years from now.
a What is today's present value, assuming a discount rate of
b The company announces that new sanctions will hit the business and after careful analysis you believe that the company's risk increases What will be the new present value when taking this into account?
c Due to ongoing geopolitical uncertainty, the Fed decides to inject more money to the economy and lower interest rates further, by about Compared to a and ignoring the info scenario in b what is the new present value of this bond?
for b and c assume that the discount rate is updated proportionally to the percentage changes
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