Problem: The Walter company issued a 25 year bond 5 years ago with a face value of $1,000. The bond pays interest semiannually at 10% annual rate.
a. What is the bond's price today if the interest rate on comparable new issues is 12%?
b. What is the price today if the interest rate is 8%?
c. What is the price today if the interest rate is 10%?
d. Calculate the current yields for part a, b, and d.
e. explain the results of parts a & b interm of oppoturnies avialable to investors.