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(Bond valuation relationships) Arizona Public Utilities issued a bond that pays $80 in interest, with...

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Accounting

(Bond valuation relationships) Arizona Public Utilities issued a bond that pays $80 in interest, with a $1,000 par value. It matures in 30 years. The market's required yield to maturity on a comparable-risk bond is 6 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 12 percent or (ii) decreases to 5 percent?
c. Explain the implications of your answers in part b as they relate to interest-rate risk, premium bonds, and discount bonds.
d. Assume that the bond matures in 15 years instead of 30 years. Recompute your answers in parts a and b.
e. Explain the implications of your answers in part d as they relate to interest-rate risk, premium bonds, and discount bonds.
a. What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is 6 percent?
$1275.30(Round to the nearest cent.)
b.(i) What is the value of the bond if the market's required yield to maturity on a comparable-risk bond increases to 12 percent?
$ (Round to the nearest cent.)
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