Berlin Corporation has $1,000 par value, 10-year bonds outstanding that were issued five years ago with...

Berlin Corporation has $1,000 par value, 10-year bonds outstanding that were issued five years ago with a stated annual coupon rate of 6% with annual interest payments. These bonds now have five years remaining to maturity. Please calculate the value of these bonds today if the market rate of return is 8%? 6%? And 4%? What can you say about the relationship between the coupon rate, the market rate, and the value of bonds?

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jeff jeffy answered 2 years ago

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