1 - 2 Page Word Doc + Excel Spread sheet

Using the attached Excel file, respond to the following questions:

• Assume that UPC is issuing a 10-year, $10,000 par value bond with a 6% annual coupon if its required rate of return is 6%. What is the value of this bond? Show your calculations in the Excel file.
• If the coupon rate changes to 7%, would UPC be issuing a discount or a premium bond? Show your calculations in the Excel file.
• If the coupon rate changes to 5%, would UPC be issuing a discount or a premium bond? Show your calculations in the Excel file.
• What are the values of the 5%, 6%, and 7% coupon bonds over time if the required return remained at 6%? Complete the table for years 1 to 8.
• Assume that UPC was successful in generating $15 million from its bond issue. Design a strategy for the financing of project C. Respond using a Word document

12/5/2016 21:23 Bonds Valuation and Cost of Capital Bond Price a) Assume that UPC is issuing a 10-year, $10,000 par value bond with a 6% annual coupon if its required rate of return is 6%? What is the value of this bond? N CPN % YTM Par Value PRICE 10 6% 6% $10,000 Years to Maturity Coupon Rate Yield-To-Maturity ??? Discount or Premium b) If the coupon rate changes to 7%, would UPC be issuing a discount or a premium bond? N CPN % YTM Par Value PRICE 10 7% 6% $10,000 A premium bond is one in which its present value or price is higher than its value. A discount bond is one in which its present value or price is lower th par value. ??? c) If the coupon rate changes to 5%, would UPC be issuing a discount or a premium bond? N CPN % YTM Par Value PRICE 10 5% 6% $10,000 ??? A premium bond is one in which its present value or price is higher than its value. A discount bond is one in which its present value or price is lower th par value. d) Values of the 5%, 6%, and 7% coupon bonds over time if the required return remained at 6%. Complete the table for years 1-8. 6% coupon bond Maturity 0 1 2 3 4 5 6 7 8 9 10 5% coupon bond 6% coupon bond 7% coupon bond $9,263.99 $10,000 $10,736.01 $10,000.00 $10,000 $10,000.00 pon if its required rate ond? ue or price is higher than its face or par nt value or price is lower than its face or ond? ue or price is higher than its face or par nt value or price is lower than its face or ed at 6%. Complete the