Basic bond valuation Complex Systems has an outstanding issue of $1000-par-value bonds with a 13% coupon interest rate. The issue pays interest annually and has 16 years remaining to its maturity date.

a.If bonds of similar risk are currently earning a rate of return of 9%, 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 13% instead of 9%, 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 9%, the Complex Systems bond should sell today for$ (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.)

A. Since Complex Systems' bonds were issued, there may have been a change in the supply-demand relationship for money or a shift in the investors' attitudes towards the firm. B. 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.

C. 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.

D. Since Complex Systems' bonds were issued, there may have been a change in the number of bonds available or a change in the coupon interest rate. c.

If the required return were at 13% instead of 9%, the current value of Complex Systems' bond would be $ nothing. (Round to the nearest cent.)