Shannon Corporation has two bonds outstanding.Both bonds have coupon rates of 10% and one has a maturity of 10 years,while the other has a maturity of 20 years.Interest is paid semi-annually.Calculate the following for both bonds.
A)If market rates for bonds of equal risk fell to 8% what would be the maximum price an investor would be willing to pay for these bonds?
B)If market rates for bonds of equal risk remained at 10%,what would be the bonds' current worth?
C)If market rates for bonds of equal risk rose to 12%,what would be the bonds' theoretical value?
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