Bond value and changing required returns Midland Utilities has a bond issue outstanding that will mature to its $$1,000$ par value in $13$ years. The bond has a coupon interest rate of $13\%$ and pays interest ally.

a$.$ Find the bond value if the required return is $(1)13\%,(2)17\%,$ and $(3)10\%.$

b$.$ Use your finding in part a and the graph here, to discuss the relationship between the coupon rate, the required return and the market value of the bond relative to its par the

c$.$ What two possible reasons could cause the required return to differ from the coupon interest rate?

a$.(1)$ The value of the bond, if the required return is $13\%,$ is $$

$($Round to the nearest cent.$)$

$(2)$ The value of the bond, if the required return is $17\%,$ is $

$($Round to the nearest cent.$)$

$(3)$ The value of the bond, if the required return is $10\%,$ is &

$($Round to the nearest cent.$)$

b$.$ Use your finding in part a and the graph here, $($i$),$ to answer the following questions: $($Select from the drop$-$down menus.$)$

When the required return is less than the coupon rate, the market value is

the par value.

When the required return is equal to the coupon rate, the market value is

the par value.

When the required return is greater than the coupon rate, the market value is

the par value.

c$.$ What two possible reasons could cause the required return to differ from the coupon interest rate? $($Select the best answer below.$)$

A$.$ Firm's risk has changed.

B$.$ Bond contract has changed.

C$.$ Cost of funds has changed.

D$.$ Tax rate has changed.