If Walmart sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate, and semiannual interest payments.
a. Two years after the bonds were issued, the going rate of interest on bonds such as these fell to 4%. At what price would the bonds sell?
b. Suppose that 3 years after the initial offering, the going interest rate had risen to 12%. At what price would the bonds sell?
c. Suppose that 3 years after the initial offering, the interest rates fell to 7%. At what price would the bonds sell?