Problem: Calculate the following Bond Values:
Bond A: 5 year bond, CPN = 7.5%, par value = $1000, Required Return = 12%
Bond B: 5 year bond, CPN = 0%, par value = $1000, Required Return = 5.75%
Bond C: 10 year bond, CPN = 4.25%, par value = $1000, Required Return = 7%
Explain why and how the value of corporate bonds (par @ $1,000) moves when interest rates change. What risks exists for a company with regards to their bond rating?