Ford Motors issues a 6% coupon bond, with a maturity of 10 years. The face value (par) of the bond, payable at maturity, is $1,000.
What are you willing to pay for this bond if your required rate of return is 7.5%?
How much would you be willing to pay if the coupon payments come twice a year, rather than once?
In words, explain what would happen to your willingness to pay for the bond if your required rate of return was 5.0% rather than 7%.