1. B Corporation has $1000 par value bonds with 9 years left to maturity, a stated annual coupon rate of 6.5 percent (with annual interest payments).
What are these bonds worth today if the required market rate of return is 6 percent? _________
What are these bonds worth today if the required market rate of return is 5 percent? __________
What are these bonds worth today if the required market rate of return is 3 percent? __________
What is the relationship between the coupon rate, changes in the market rate and the value of these bonds?