Media Bias Inc. issued bonds 10 years ago at $1,000 per bond. These bonds had a...

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Media Bias Inc. issued bonds 10 years ago at $1,000 per bond.These bonds had a 40-year life when issued and the annual interestpayment was then 13 percent. This return was in line with therequired returns by bondholders at that point in time as describedbelow: Real rate of return 3 % Inflation premium 5 Risk premium 5Total return 13 % Assume that 10 years later, due to goodpublicity, the risk premium is now 2 percent and is appropriatelyreflected in the required return (or yield to maturity) of thebonds. The bonds have 30 years remaining until maturity. Computethe new price of the bond. Use Appendix B and Appendix D for anapproximate answer but calculate your final answer using theformula and financial calculator methods. (Do not roundintermediate calculations. Round your final answer to 2 decimalplaces. Assume interest payments are annual.)

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The Revised Yield to Maturity of the Bond The Revised Yield to Maturity of the Bond Real rate of return Inflation premium Revised Risk premium 300 500 200 1000 New Price of the Bond The See Answer

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Media Bias Inc. issued bonds 10 years ago at $1,000 per bond.These bonds had a 40-year life when issued and the annual interestpayment was then 13 percent. This return was in line with therequired returns by bondholders at that point in time as describedbelow: Real rate of return 3 % Inflation premium 5 Risk premium 5Total return 13 % Assume that 10 years later, due to goodpublicity, the risk premium is now 2 percent and is appropriatelyreflected in the required return (or yield to maturity) of thebonds. The bonds have 30 years remaining until maturity. Computethe new price of the bond. Use Appendix B and Appendix D for anapproximate answer but calculate your final answer using theformula and financial calculator methods. (Do not roundintermediate calculations. Round your final answer to 2 decimalplaces. Assume interest payments are annual.)