Basic bond valuation Complex Systems has an outstanding issue of $1,000 par value bonds with a 8% coupon interest rate. The issue pays interest annually and has 13 years remaining to its maturity date. a. If bonds of similar risk are currently earing a rate of return of 7%, how much should the Complex Systems bond sell for today? b. Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond. c. If the required return were at 8% instead of 7%, what would be the current value of Complex Systems' bond? Contrast this finding with your findings in part a and discuss a. If bonds of similar risk are currently earning a rate of return of 7%, the Complex Systems bond should sell today for $1 . (Round to the nearest cent.) b. Describe the two possible reasons why the rate on similar-risk bonds is below the coupon interest rate on the Complex Systems bond. (Select the best answer below.) O A. B C Since Complex Systems' bonds were issued, there may have been a shift in the supply-demand relationship for their product or a change in the risk towards loans. Since Complex Systems bonds were issued here may have been a chan e in the number o bonds ava a e or a hange n he coupon interest rate. Since Complex Systems' bonds were issued, there may have been a shift in the supply-demand relationship for money or a change in the risk towards the firm Since Complex Se h ba cge in he supy drnhit the ivetrh C. If the required return were at 8% instead of 7%, the current value of Complex Systems' bond would be S Round to the nearest cent. When the required return is equal to the coupon rate, the bond value is | the par value. In contrast in part a above, if the required return is less than the coupon rate, the bond will sell at a (its value will be greater than par). (Select the best answers from the drop-down menus.)