Universal Systems has an outstanding issue of $1,000 par value bonds with a 12% coupon interest rate. The issue pays interest annually and has 16 years remaining to maturity date.

1. If bonds of similiar risk are currently earing a 10% rate of return how much should Universal Systems bond sell for today?

2. Describe the two possible reasons why similar risk bonds are currently earing a retun below the coupon interest rate on the Universal Systems bond.

3. If the required return were at 12% instead of 10% what would the current value of Universal Systems bond be? Contrast this finding with your findings in part a and discuss.

Universal Systems has an outstanding issue of $1,000-par-value bonds

with

a 12% coupon interest rate. The issue pays interest annually and has 16

years remaining to its maturity date.

If bonds of similar risk are currently earning a 10% rate of return,

how much should the Universal Systems bond sell for today?

Describe the two possible reasons why similar-risk bonds are currently

earning a return below the coupon interest rate on the Universal Systems

bond.

If the required return were at 12% instead of 10%, what would the

current value of Universal Systems' bond be? Contrast this finding with

your findings in part a and discuss.

1. If bonds of similiar risk are currently earing a 10% rate of return how much should Universal Systems bond sell for today?

2. Describe the two possible reasons why similar risk bonds are currently earing a retun below the coupon interest rate on the Universal Systems bond.

3. If the required return were at 12% instead of 10% what would the current value of Universal Systems bond be? Contrast this finding with your findings in part a and discuss.

Universal Systems has an outstanding issue of $1,000-par-value bonds

with

a 12% coupon interest rate. The issue pays interest annually and has 16

years remaining to its maturity date.

If bonds of similar risk are currently earning a 10% rate of return,

how much should the Universal Systems bond sell for today?

Describe the two possible reasons why similar-risk bonds are currently

earning a return below the coupon interest rate on the Universal Systems

bond.

If the required return were at 12% instead of 10%, what would the

current value of Universal Systems' bond be? Contrast this finding with

your findings in part a and discuss.

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