Bond value and time—Constant required returns   Pecos Manufacturing has just issued a 15​-year, 14​% coupon interest​ rate, $1,000​-par bond that pays interest annually. The required return is currently 13​%, and the company is certain it will remain at 13​% until the bond matures in 15 years.   a.  Assuming that the required return does remain at 13​% until​ maturity, find the value of the bond with​ (1) 15 ​years, (2) 12​ years, (3) 9​ years, (4) 6​ years, (5) 3​ years, (6) 1 year to maturity. b.  All else remaining the​ same, when the required return differs from the coupon interest rate and is assumed to be constant to​ maturity, what happens to the bond value as time moves toward​ maturity?

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Bond value and time—Constant required returns
 
Pecos Manufacturing has just issued a 15​-year, 14​% coupon interest​ rate, $1,000​-par bond that pays interest annually. The required return is currently 13​%, and the company is certain it will remain at 13​% until the bond matures in 15 years.
 
a.  Assuming that the required return does remain at 13​% until​ maturity, find the value of the bond with​ (1) 15 ​years, (2) 12​ years, (3) 9​ years, (4) 6​ years, (5) 3​ years, (6) 1 year to maturity.
b.  All else remaining the​ same, when the required return differs from the coupon interest rate and is assumed to be constant to​ maturity, what happens to the bond value as time moves toward​ maturity?

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