Miller Corporation has a premium bond making semiannual payments. The bond pays a 9.4 percent coupon, has a YTM of 5.3 percent, and has 13 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond pays a 5.3 percent coupon, has a YTM of 9.4 percent, and also has 13 years to maturity. Assume interest rates remain unchanged.
(a) Calculate the price of Miller Corporation bond.
In 1 Year
In 3 Years
In 8 Years
In 12 Years
In 13 Years
(b) Calculate the price of Modigliani Company bond.
In 1 Year
In 3 Years
In 8 Years
In 12 Years
In 13 Years