Laurel inc and hardy corp both have 9 percent coupon bonds, Ask an Expert

Finance

Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has four years to maturity, whereas the Hardy Corp. bond has 15 years to maturity.

If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds?

Percentage change in price of Laurel %

Percentage change in price of Hardy %

If interest rates were to suddenly fall by 2 percent instead, what would the percentage change in the price of these bonds be then?

Percentage change in price of Laurel %

Percentage change in price of Hardy %

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92087824

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