a. Calculate the values of the bonds if your required rates of return are as follows: Microsoft, 6 percent; Ford, 15 percent; Xerox, 10 percent; where MICROSOFT FORD XEROX Coupon interest rate 5.25% 7.13% 8.00% Years to maturity 30 25 16

To calculate the values of the bonds, you need to use the formula for the present value of a bond. The present value can be calculated using the following formula:

PV = C / (1 + r)^t + C / (1 + r)^(t-1) + ... + C / (1 + r) + F / (1 + r)^t

where:
PV = Present value of the bond
C = Coupon interest payment
r = Required rate of return
t = Number of years to maturity
F = Face value of the bond

Let's calculate the values of the bonds for each company based on the given information:

1. Microsoft:
Coupon interest rate = 5.25%
Required rate of return = 6%
Years to maturity = 30

Using the formula mentioned earlier:
PV = (C / (1 + r)^t) + (F / (1 + r)^t)
= (0.0525 * F) / (1 + 0.06)^30, assuming face value (F) is 1

Now, substitute the values and calculate:
PV = (0.0525 * 1) / (1 + 0.06)^30
= 0.0525 / 2.427)
≈ 0.0216

Therefore, the value of the Microsoft bond is approximately 0.0216.

2. Ford:
Coupon interest rate = 7.13%
Required rate of return = 15%
Years to maturity = 25

Using the same formula:
PV = (C / (1 + r)^t) + (F / (1 + r)^t)
= (0.0713 * F) / (1 + 0.15)^25, assuming face value (F) is 1

Substitute the values and calculate:
PV = (0.0713 * 1) / (1 + 0.15)^25
= 0.0713 / 13.097
≈ 0.0054

Therefore, the value of the Ford bond is approximately 0.0054.

3. Xerox:
Coupon interest rate = 8.00%
Required rate of return = 10%
Years to maturity = 16

Using the same formula:
PV = (C / (1 + r)^t) + (F / (1 + r)^t)
= (0.08 * F) / (1 + 0.10)^16, assuming face value (F) is 1

Substitute the values and calculate:
PV = (0.08 * 1) / (1 + 0.10)^16
= 0.08 / 5.604
≈ 0.0143

Therefore, the value of the Xerox bond is approximately 0.0143.

Note: The calculated values are approximate and may vary based on the specific parameters used. Additionally, these values represent the present value of the bond, which may differ from the market value depending on various factors.