A General Power bond with a face value of $1,000 carries a coupon rate of 8.7%, has 9 years until maturity, and sells at a yield to maturity of 7.7%. (Assume annual interest payments.)
a. What interest payments do bondholders receive each year?
Interest payments $
b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Price $
c. What will happen to the bond price if the yield to maturity falls to 6.7%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Price will rise/fall by $