Fast and Loose Company has outstanding a 6 percent, four-year, $1,000-par-value bond on which interest is paid quarterly.

Fast and Loose Company has outstanding a 6 percent, four-year, $1,000-par-value bond on which interest is paid quarterly.

a. If the market required rate of return is 18 percent, what is the market value of the bond?

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b. What would be its market value if the market required return dropped to 11 percent?V

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