H Q2. Thousand Oaks Healthcare sold bonds that had a 20-year maturity, an 5% coupon rate with annual payments, and a $1,

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H Q2 Thousand Oaks Healthcare Sold Bonds That Had A 20 Year Maturity An 5 Coupon Rate With Annual Payments And A 1 1 (35.25 KiB) Viewed 10 times

H Q2. Thousand Oaks Healthcare sold bonds that had a 20-year maturity, an 5% coupon rate with annual payments, and a $1,000 par value. A a. Suppose that 7 years after the bonds were issued, the required interest rate fell to 3%. What would be the bonds' value? Does it sell at a premium or at a discount? Why does it sell at a premium or at a discount? (5 points) b. Suppose that 10 years after the bonds were issued, the required interest rate rose to 8%. What would be the bonds' value? Does it sell at a premium or at a discount? Why does it sell at a premium or at a discount? (5 points) c. If the bond is 4 years remaining to maturity. What is the yield to maturity on the issue if the current market price is $883? (5 points)