Question: Please answer all of the following problems by typing the numerical solution into the space provided beneath each question, also attach an Excel file 1.

Please answer all of the following problems by typing the numerical solution into the space provided beneath each question, also attach an Excel file

1. B Corporation has $1000 par value bonds with 8 years left to maturity, a stated annual coupon rate of 5 percent (with annual interest payments). Please calculate the value of these bonds using the market interest rates below:

What are these bonds worth today if the required market rate of return is 6 percent?

2. What are these bonds worth in a 5 percent market?

3. What are these bond worth in a 4 percent market?

4. What can you say about the relationship between the coupon rate, the market rate and the value of bonds?

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1 Computation of the Bond Value Coupon rate 500 Maturity yr 8 YTM 600 Par value 1000 N 8 PV 1000 PMT ... View full answer

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