A bond of the eastold corporation pays an 11 coupon and has, Ask an Expert

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A bond of the Eastold Corporation pays an 11% coupon and has a $1000 par value. The coupon is paid semi-annually (twice a year). The bond matures in 10 years. The market's required yield to maturity on a comparable-risk bond is 9%.

a. Calculate the value of a bond. (8p)

b. How does the value change if the market's required yield to maturity increases to 12%?(8p)

c. How does the value change if the market's required yield to maturity decreases to 6%?(8p)

d. d) Interpret your findings in parts a), b)and c).(4p)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91548216

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