Miki Corporation has a premium bond making semiannual payments. The bond pays a coupon of 8 percent, has a YTM of 6 perc
Posted: Wed Jul 06, 2022 6:39 pm
Miki Corporation has a premium bond making semiannual payments.The bond pays a coupon of 8 percent, has a YTM of 6 percent,and has 13 years to maturity. The Modigliani Company has adiscount bond making semiannual payments. This bond pays a couponof 6 percent, has a YTM of 8 percent, and also has 13 years tomaturity. If interest rates remain unchanged, what doyou expect the price of these bonds to be 1 year from now? In3 years? In 8 years? In 13 years? What’s going on here?Illustrate your answers by graphing bond prices versus time tomaturity.