Twin Oaks Center has a bond issue outstanding with a coupon rate of 7% and 4 years remaining until maturity. The par value of the bond is $1,000, and the bond pays interest annually.
a) What is the current value of the bond if present market conditions justify a 14% required rate of return?
b) If Twin oaks' four year bond had semiannual coupon payments. What would be it current value?
c) Assume that it had a semiannual coupon but 20 years remaining to maturity. What is the current value under these conditions? (Assuming a 7% semiannual required rate of return).