1. What is the value of a 5% coupon bond maturing in 30 years if it is priced to yield 8%?
2. Define or describe INTEREST RATE RISK. Be sure to include PRINCIPAL risk and REINVESTMENT risk in your discussion.
3. Briefly compare the equity claims and the debt claims on the firm's cash flows. Which claim is riskier therefore?
4. What is the value of a 8% coupon bond maturing in 26 years if it is priced to yield 5.4%?