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Relationship between coupon rate-changes in market rate

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B Corporation has $1000 par value bonds with 9 years left to maturity, a stated annual coupon rate of 6.5 percent (with annual interest payments). What are these bonds worth today if the required market rate of return is 9 percent?

  • What are these bonds worth today if the required market rate of return is 7.5 percent?
  • What are these bonds worth today if the required market rate of return is 4 percent?
  • What is the relationship between the coupon rate, changes in the market rate and the value of these bonds?

Reference no: EM132618608

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