Explore BrainMass

Explore BrainMass

    Bond Values

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Your company has two bond issues outstanding. They both have an 8% coupon rate and a $1,000 par value. One bond matures in two years while the other bond matures in 20 years.

    1. Using an Excel spread sheet, calculate the value of each of these bonds if:
    a) Current market rates are 5%.
    b) Current market rates are 8%.
    c) Current market rates are 13%.
    2. Why does the longer-term bond fluctuate more in value than the shorter-term bond?

    Can you help me get started on this assignment?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:50 pm ad1c9bdddf

    Solution Summary

    The solution goes into a great amount of detail in order to answer the question. The solution is very well written and easy to understand. Detailed step by step instructions have been provided to answer all the questions being asked. Overall, an excellent response to the question being asked.