Question: Logan Corp Issued a non- callable bond that has 12 years to maturity, an 8% semi annual coupon and a $1000 par value. Your required

Logan Corp Issued a non- callable bond that has 12 years to maturity, an 8% semi annual coupon and a $1000 par value. Your required return on the Logan corp bond is 12%, if you buy it, you plan to hold it for 7 years. You have expectations that in 7 years, the yield to maturity on a 5 year bond with similar risk will be 7.5%.

a. how much would you be willing to pay for the Logan Corp bond today?

b. Does this bond face greater or less price risk than a bond with 10 years to maturity and an 8% semiannual coupon?

c. Does this bond face greater or less price risk than a bond with 12 years to maturity and a 4% semiannual coupon?

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