Computation of Value of a Bond using various required rate of return and when the interest on these bonds is paid and compounded annually.

Consider Allied Signal Corporation's percent bonds that mature on June 1, 2010. Assume that the interest on these bonds is paid and compounded annually. Determine the value of a $1,000 denomination Allied Signal Corporation bond as of June 1, 2004, to an investor who holds the bond until maturity and whose required rate of return is:

1. 7 percent

2. 9 percent

3. 11 percent

4. What would be the value of the Allied Signal Corporation bonds at an 8 percent required rate of return if the interest were paid and compounded semi-annually?