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(Bond valuation relationships)A bond of Telink Corporation pays $110 in annual interest, with a $1,000...

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Question

Finance

(Bond valuation relationships)A bond of Telink Corporation pays

$110

in annual interest, with a

$1,000

par value. The bonds mature in

20

years. The market's required yield to maturity on a comparable-risk bond is

10

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.Interpret your findings in parts a and

b.

a.What is the value of the bond if the market's required yield to maturity on a comparable-risk bond is

10

percent?

$nothing

(Round to the nearest cent.)

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