Question: a) ABC Corp. has a bond issue outstanding with an annual coupon of 6%, made in annual payments, and 7 years remaining until maturity. The

a) ABC Corp. has a bond issue outstanding with an annual coupon of 6%, made in annual payments, and 7 years remaining until maturity. The par value of the bond is $1000. Determine the current value of the bond if present market conditions justify a 10% yield.

b) ABC Corp. has a bond issue outstanding with an annual coupon of 6%, made in annual payments, and 5 years remaining until maturity. The par value of the bond is $1000. Determine the current value of the bond if present market conditions justify a 12% yield.

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