Calculate the value of the bond

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Reference no: EM131220099

A bond of Telink Corporation pays $100 in annual interest, with a $1,000 par value. The bonds mature in 20 years. The market's required yield to maturity on a comparable-risk bond is 9 percent.

a. Calculate the value of the bond.

b. How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 14 percent or (ii) decreases to 5 percent?

c. Interpret your findings in parts a and b.

Reference no: EM131220099

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