Compute what would be the present value of the bond

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Given below are information for an existing bond that provides annual coupon payments:

Par value of P1,000;

The coupon rate of 11%;

Maturity of four (4) years; and

The required rate of return by investors is 11%.

Problem a. What is the present value of the bond?

Problem b. If the required rate of return by investors were 14 % instead of 11%, what would be the present value of the bond?

Problem c. If the required rate of return by investors were 9%, what would be the present value of the bond?

Reference no: EM132756032

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