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A bond of Telink Corporation pays $120 in annual interest, with a $1,000 par value. The bonds mature in 10 years. The market's required yield to maturity on a comparable-risk bond is 9 percent. a.Calculate the value of the bond. b.How does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to 14 percent or (ii) decreases to 4 percent? c.Interpret your findings in parts a and b. Question content area bottom Part 1 a.What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 9 percent? $ (Round to the nearest cent.) Part 2 b. (i)What is the value of the bond if the market's required yield to maturity on a comparable risk bond increases to 14 percent? $ (Round to the nearest cent.) Part 3 b. (ii)What is the value of the bond if the market's required yield to maturity on a comparable risk bond decreases to 4 percent? $ (Round to the nearest cent.) Part 4 c.The change in the value of a bond caused by changing interest rates is called interest-rate risk. Based on the answers in part b, a decrease in interest rates (the yield to maturity) will cause the value of a bond to increase/be unchanged/decrease by contrast, an increase in interest rates will cause the value to increase/be unchanged/decrease. (Select from the drop-down menus.) Part 5 Also, based on the answers in part b, if the yield to maturity (current interest rate): equals the coupon interest rate, the bond will sell at par/a discount/a premium exceeds the bond's coupon rate, the bond will sell at par/a discount/a premium and is less than the bond's coupon rate, the bond will sell at par/a discount/a premium. (Select from the drop-down menus.)

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