$10$ Points Use excel to find correct answer here

Financial managament

Suppose Planet Express, Inc. has a liability due in five years. The company is going to buy bonds

today in order to meet the future obligation. The liability and current YTM are as follows:

liability amount $=$ $$100,000,000$; yield to maturity $=10\%($semiannual compounding$).$

a$.$ At the current YTM$,$ what is the face value of the bonds the company has to purchase

today in order to meet its future obligation? Assume that the bonds in the relevant

range will have the same coupon rate as the current YTM and these bonds make

semiannual coupon payments.

b$.$ Assume that the interest rates remain constant for the next five years. Thus, when the

company reinvests the coupon payments, it will reinvest at the current YTM$.$ What is the

value of the portfolio in five years?

c$.$ Assume that immediately after the company purchases the bonds, interest rates either

rise or fall by one percent. What is the value of the portfolio in five years under these

circumstances?

Use excel to find correct answer here