Discuss the relationship between coupon interest rate

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A utilities company has a bond issue outstanding that will mature to its $1,000 par value in 19 years. The bond has a coupon interest rate of 11?% and pays interest annually.

-Find the value of the bond if the required return is? (1) 11?%, ?(2) 15?%, and? (3) 8?%.

-Use your finding in part a and the graph? here, to discuss the relationship between the coupon interest rate on a bond and the required return and the market value of the bond relative to its par value.

-What two possible reasons could cause the required return to differ from the coupon interest? rate?

Reference no: EM132703438

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