What is the current value of these securities

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A middle market wholesaler is reevaluating its bonds since it is planning to issue a new bond in the current market. The firm's outstanding bond issue has 6 years remining until maturity. The bonds were issued with a 6 percent coupon rate (paid semiannually) and a par value of $1,000. Because of increased risk the required rate has risen to 10 percent.

1) What is the current value of these securities?

2) What will be the value of these securities in one year if the required return declines to 8 percent?

 

Reference no: EM13271200

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