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  3. 2.) pecos manufacturing has just issued a 15-year,

2.) Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1000 par bond...

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2.) Pecos Manufacturing has just issued a 15-year, 12% coupon interest rate, $1000 par bond that pays interest seminannually. The required return is 14% and the company is certain it will remain at 140% until the bond matures in 15 years. a. Assuming that the required return does remain at 14% until maturity, find the value of the bond with (1) 15 years, (2) 12 years, (3) 9 years, (4) 6 years, (5) 3 years, and (6) 1 year to maturity. b. Plot your findings on a set of "time to maturity (x-axis)-market value of bond (y axis)" axes. c. All else remaining the same, when the required return differs from the coupon interest rate and is assumed to be constant maturity, what happens to the band value as time moves toward maturity Explain in light of the graph in part by

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