Question: Chapter 6- Q1 Basic bond valuation Complex Systems has an outstanding issue of $1,000 par-value bonds with a 12% coupon interest rate. The issue pays

Chapter 6- Q1 Basic bond valuation Complex Systems has an outstanding issue of $1,000 par-value bonds with a 12% 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 10% rate of return, 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 12% instead of 10%, what would the current value of Complex Systems' bond be? Contrast this finding with your findings in part a and discuss

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