Question: Wilson Company will issue $300,000,000 of seven percent, $1000 per bonds on November 15, 2004. The bonds will pay interest semiannually & mature on November 15, 2011.
[A] Calculate the rate of an individual bond from this issue to an investor who purchases the Wilson bond on the date of issue [November 15, 2004] suppose they require an 8% return?
[B] Without doing the computation would the value of the bond go up, go down or stay the same if the maturity date was changed to November 15, 2009. Explain answer.
[C] Without doing the computation would the value of the bond go up, go down or stay the same if the required interest rate increased to 12 percent. Explain your answer.