You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores....

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Finance

You are called in as a financial analyst to appraise the bondsof Olsen’s Clothing Stores. The $1,000 par value bonds have aquoted annual interest rate of 10 percent, which is paidsemiannually. The yield to maturity on the bonds is 12 percentannual interest. There are 25 years to maturity. Use Appendix B andAppendix D for an approximate answer but calculate your finalanswer using the formula and financial calculator methods.
a. Compute the price of the bonds based on semiannual analysis.(Do not round intermediate calculations. Round your final answer to2 decimal places.)
Bondprice
b. With 20 years to maturity, if yield tomaturity goes down substantially to 8 percent, what will be the newprice of the bonds? (Do not round intermediatecalculations. Round your final answer to 2 decimalplaces.)
New bondprice

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Information provided Face value future value 1000 Time 25 years2 50 semiannual periods Yield to maturity 122 6 Coupon rate 102 5 Coupon payment 0051000 50 The price of the bond is See Answer

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You are called in as a financial analyst to appraise the bondsof Olsen’s Clothing Stores. The $1,000 par value bonds have aquoted annual interest rate of 10 percent, which is paidsemiannually. The yield to maturity on the bonds is 12 percentannual interest. There are 25 years to maturity. Use Appendix B andAppendix D for an approximate answer but calculate your finalanswer using the formula and financial calculator methods.a. Compute the price of the bonds based on semiannual analysis.(Do not round intermediate calculations. Round your final answer to2 decimal places.)Bondpriceb. With 20 years to maturity, if yield tomaturity goes down substantially to 8 percent, what will be the newprice of the bonds? (Do not round intermediatecalculations. Round your final answer to 2 decimalplaces.)New bondprice