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

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.

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