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10-4 Suppose that five years ago Cisco Systems sold a 15 years bond issue that had...

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Finance

10-4 Suppose that five years ago Cisco Systems sold a 15 yearsbond issue that had a $1000 par value and a 7 percent coupon rate.Interest is paid semiannually.

a- If the going interest rate has risen to 10 percent, at whatprice would the bonds be selling today?

b- Suppose that the interest rate remained at 10 percent for thenext 10 years. What would happen to the price of Cisco's bonds overtime?

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