Question

Miller Corporation has a premium bond making semiannual payments. The bond pays a coupon of 7 percent, has a YTM of 5 percent, and has 11 years to maturity. The Modigliani Company has a discount bond making semiannual payments. This bond pays a coupon of 5 percent, has a YTM of 7 percent, and also has 11 years to maturity.

What is the price of each bond today? Price of Miller Corporation bond $_________   Price of Modigliani Company bond $_________ If interest rates remain unchanged, what do you expect the prices of these bonds to be 1 year from now? In 2 years? In 6 years? In 10 years? In 11 years? Price of bond Miller Corporation Bond Modigliani Company Bond   1 year $ $   2 years $ $   6 years $ $   10 years $ $   11 years $ $