Question: Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer

Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions: Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows: Microsoft, 5 a. percent; GE Capital, 15.5 percent; and Morgan Stanley, 10 percent; where: b. The bonds are selling for the following amounts: Microsoft $1,005 GE Capital $567 Morgan Stanley $819 What are the expected rates of return for each bond? c. How would the value of the bonds change if (1) your required rate of return (r) increased 2 percentage points or (2) decreased 2 percentage points? a. If your required rate of return on the Microsoft bond is 5 percent, what is the value of the bond? (Round to the nearest cent.) Here are data on $1,000 par value bonds issued by Microsoft, GE Capital, and Morgan Stanley. Assume you are thinking about buying these bonds. Answer the following questions: Assuming interest is paid annually, calculate the values of the bonds if your required rates of return are as follows: Microsoft, 5 a. percent; GE Capital, 15.5 percent; and Morgan Stanley, 10 percent; where: b. The bonds are selling for the following amounts: Microsoft $1,005 GE Capital $567 Morgan Stanley $819 What are the expected rates of return for each bond? c. How would the value of the bonds change if (1) your required rate of return (r) increased 2 percentage points or (2) decreased 2 percentage points? a. If your required rate of return on the Microsoft bond is 5 percent, what is the value of the bond? (Round to the nearest cent.)
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