Bond value and time---Constant required returns   Pecos Manufacturing has just issued a 15-year, 13% coupon interest rat

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answerhappygod
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Bond value and time---Constant required returns   Pecos Manufacturing has just issued a 15-year, 13% coupon interest rat

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Bond value and time---Constant required returns   Pecos
Manufacturing has just issued a 15-year, 13% coupon interest rate,
$1,000-par bond that pays interest annually. The required return is
currently 17%, and the company is certain it will remain at 17%
until the bond matures in 15 years.
a.  Assuming that the required return does remain at 17​%
until​ maturity, find the value of the bond with​ (1) 15
​years, (2) 12​ years, (3) 9​ years, (4) 6​ years,
(5) 3​ years, (6) 1 year to maturity.
b.  All else remaining the​ same, when the required return
differs from the coupon interest rate and is assumed to be constant
to​ maturity, what happens to the bond value as time moves
toward​ maturity?
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