Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10% coupon rate, and semiannual interest payments. a. Two years after the bonds were issued, the...

Suppose Hillard Manufacturing sold an issue of bonds with a 10-year
maturity, a $1,000 par value, a 10% coupon rate, and semiannual interest
payments.
a. Two years after the bonds were issued, the going rate of interest on bonds
such as these fell to 6%. At what price would the bonds sell?
b. Suppose that 2 years after the initial offering, the going interest rate had
risen to 12%. At what price would the bonds sell?
c. Suppose that 2 years after the issue date (as in Part a) interest rates fell to
6%. Suppose further that the interest rate remained at 6% for the next 8
years. What would happen to the price of the bonds over time?