Question

Miller Corporation has a premium bond making semiannual
payments. The bond has a coupon rate of 12 percent, a YTM of 10
percent, and 12 years to maturity. The Modigliani Company has a
discount bond making semiannual payments. This bond has a coupon
rate of 10 percent, a YTM of 12 percent, and also has 12 years to
maturity. Both bonds have a par value of $1,000.

What is the price of each bond today? **(Do not round
intermediate calculations. Round your answers to 2 decimal places,
e.g., 32.16.)**

Price of Miller bond | $ | |

Price of Modigliani bond | $ | |

If interest rates remain unchanged, what do you expect the price of
these bonds to be 1 year from now? In 3 years? In 7 years? In 11
years? In 12 years? **(Do not round intermediate
calculations. Round your answers to 2 decimal places, e.g.,
32.16.)**

Price of bond in: | Miller bond | Modigliani bond | ||

1 year | $ | $ | ||

3 years | $ | $ | ||

7 years | $ | $ | ||

11 years | $ | $ | ||

12 years | $ | $ | ||

Answer #1

Miller Corporation has a premium bond making semiannual
payments. The bond pays a coupon of 7 percent, has a YTM of 5
percent, and has 17 years to maturity. The Modigliani Company has a
discount bond making semiannual payments. This bond pays a coupon
of 5 percent, has a YTM of 7 percent, and also has 17 years to
maturity. Both bonds have a par value of $1,000. What is the price
of each bond today? If interest rates remain...

Miller Corporation has a premium bond making semiannual
payments. The bond pays an 7 percent coupon, has a YTM of 5
percent, and has 16 years to maturity. The Modigliani Company has a
discount bond making semiannual payments. This bond pays a 5
percent coupon, has a YTM of 7 percent, and also has 16 years to
maturity. (Do not round intermediate calculations. Round
the final answers to 2 decimal places. Omit $ sign in your
response.)
If interest rates...

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percent, and also has 12 years to maturity. The bonds have a $1,000
par value.
What is the price of each bond today? (Do not round
intermediate...

Bond X is a premium bond making semiannual payments. The bond
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Bond X is a premium bond making semiannual payments. The bond
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What is the price of each bond today? (Do not round
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