What do you expect the price of these bonds to be


Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 12 percent has a YTM of 10 percent, and has 12 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond pays a coupon of 10 percent, has a YTM of 12 percent, and also has 12 years to maturity.

a. What is the price of each bond today?

b. If interest rates remain unchanged, what do you expect the price of these bonds to be 1 year from now?

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Finance Basics: What do you expect the price of these bonds to be
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