Problem: XYZ Company is planning to issue some bonds. The bonds,with a $5000.00 par value and the coupon rate of 12%,will mature in 10 years. The interest will be paid semiannually.
Q1. What would be the value of each bond when issued if the marlet interest rate is 12%
Q2. Suppose two years later from the original issuing date, the going rate in the market went down 8%. What would be the price of this bond at this time
Q3. Same as "2" except that market rate went up to 16%. What would the value of the bond be in this case