Question

# Miller Corporation has a premium bond making semiannual payments. The bond has a coupon rate of...

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 \$ \$

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