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

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Laurel, Inc., and Hardy Corp. both have 9 percent coupon bonds outstanding, with semiannual interest payments, and both are currently priced at the par value of $1,000. The Laurel, Inc., bond has three years to maturity, whereas the Hardy Corp. bond has 16 years to maturity. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of each bond? If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of each bond?

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Financial Management, Finance

Category:- Financial Management
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