Question: Hi I have 2 Questions I need help on. Chapter 5 - Hello I need help with the following 4 questions on Business Finance. Q1.)

Hi I have 2 Questions I need help on.

Chapter 5 - Hello I need help with the following 4 questions on Business Finance.

Q1.) A General Power bond carries a coupon rate of 8.7%, has 9 years until maturity, and sells at a yield to maturity of 7.7%. (Assume annual interest payments.)

a.What interest payments do bondholders receive each year?

b.At what price does the bond sell?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price: ?

c.What will happen to the bond price if the yield to maturity falls to 6.7%?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Price will ___?____ by _____?_______

Q2.) Consider three bonds with 5.90% coupon rates, all making annual coupon payments and all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years.

a.What will be the price of the 4-year bond if its yield increases to 6.90%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Bond Price: ?

b.What will be the price of the 8-year bond if its yield increases to 6.90%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Bond Price: ?

c.What will be the price of the 30-year bond if its yield increases to 6.90%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Bond Price: ?

d.What will be the price of the 4-year bond if its yield decreases to 4.90%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Bond Price: ?

e.What will be the price of the 8-year bond if its yield decreases to 4.90%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Bond Price: ?

f.What will be the price of the 30-year bond if its yield decreases to 4.90%?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Bond Price: ?

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