Bond Valuation Assignment Unless otherwise stated, assume a $1,000 par value and semiannual coupon payment. 1. A bond with 12 years to maturity has a coupon rate of 4.5%. How much is each coupon payment? 2a. A bond has a 6% coupon and matures in 15 years. If an investor requires a 7% rate of return, calculate the value of the bond? 2b. For the above bond, what is the value of the bond eight years later (matures in 7 years) at a required 7% rate of return? Explain the price change. 3.An investor evaluates two different bonds when the market required return is 5%: Bond 1 has a 7% coupon rate and 12 years to maturity and a value of $1,178.85 Bond 2 has a 7% coupon rate and 6 years to maturity and a value of $1,102.58 Calculate the value of the bonds and the percentage price change if the required rate of return increases to 5.5%. Which bond had the largest percentage price change? Explain the cause in the difference in price changes. 4.A bond is selling for a $1,160 and has a coupon rate of 8% with 8 years to maturity. What is the bond's yield to maturity? 5.A company experiences a credit ratings downgrade from A to BBB. What effect would that have on: a. The yield to maturity of the bond. b. The price of the bond. c. The size (amount) of coupon payments the company makes on the bond