A bond of Visador Corporation pays $70 in annual? interest, with a $1,000 par value. The bonds mature in 17 years. The? market's required yield to maturity on a? comparable-risk bond is 8.5 percent.
a. Calculate the value of the bond.
b. How does the value change if the? market's required yield to maturity on a? comparable-risk bond? (i) increases to 13 percent or? (ii) decreases to 6 percent?
c. Interpret your finding in parts a and b.