Quinn Electric Company has outstanding a bond issue that will mature
to its $1,000 par value in 12 years.  The bond has a coupon rate of
15% and pays the interest annually.

a)	Find the value of the bond if the required return is (1) 10
percent, (2) 15 percent and (3) 17 percent.
b)	Use your findings in part a) to discuss the relationship between
coupon interest rate on a bond and the required return and the market
value of the bond relative to its par value.
c)	What two reasons cause the required return to differ from the
coupon interest rate?

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Request for Question Clarification by scriptor-ga on 17 Aug 2005 17:32 PDT

May I respectfully suggest that you do your homework assignment
yourself? Google Answers discourages and may remove such questions.

Scriptor

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Clarification of Question by hacc-ga on 17 Aug 2005 17:57 PDT

Thanks for the concern, but these are practice problems that I am
having trouble with!

Continuing my comment on the question about Drake Co.,
and they wouldn't post two such questions at once.