Kodicom, Inc. has 15-year bonds with a $5000 maturity value and a quoted coupon rate of 12%

Question:

Kodicom, Inc. has 15-year bonds with a $5000 maturity value and a quoted coupon rate of 12% paid semiannually. The current yield is 10% compounded semiannually.

(a) Compute the price of these bonds.

(b) Suppose that with 12 years remaining until maturity, the yield rate drops to 8% compounded semiannually. Find the new price of these bonds.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...