Annual coupon payments, Assume the following information

Annual coupon payments

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Reference no: EM133674247

Assume the following information for an existing bond that provides annual coupon payments:

Given:

Par value: $1,000

Coupon rate: 11 percent

Maturity: 4 years

Required rate of return by investors: 11 percent

1. What is the present value of the bond?

2. If the required rate of return by investors was 14 percent instead of 11 percent, what would be the present value of the bond?

3. If the required rate of return by investors was 9 percent, what would be the present value of the bond?

Reference no: EM133674247

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