Fix- It Inc. recently issued 10- year, $ 1,000 par value bonds at an 8% coupon rate. Two years later, similar bonds are yielding investors 6%. At what price are Fix- Its bonds selling? What would the bonds be selling for if yields had risen to 12%? Assume the conditions in part a. Further assume interest rates remain at 6% for the next 8 years. What would happen to the price of the Fix- It bonds over that time?

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Fix- It Inc

Accounting Mar 15, 2021

Fix- It Inc. recently issued 10- year, $ 1,000 par value bonds at an 8% coupon rate.

1. Two years later, similar bonds are yielding investors 6%. At what price are Fix- Its bonds selling?

1. What would the bonds be selling for if yields had risen to 12%?
2. Assume the conditions in part a. Further assume interest rates remain at 6% for the next 8 years. What would happen to the price of the Fix- It bonds over that time?

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