Calculating the Price of a Bond
A general motors bond (face value of $1000) carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yeild to maturity of 9 percent
a. what interest payments do bondholders receive each year?
b. At what price does the bond sell? (assume annual interest payments.)
c what will happen to the bond price if the yield to maturity falls to 7%?