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A bond that matures in 12 years has a $1,000 par value. The annual coupon interest...

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Finance

A bond that matures in 12 years has a $1,000 par value. Theannual coupon interest rate is 11 percent and the market's requiredyield to maturity on a comparable-risk bond is 18 percent. Whatwould be the value of this bond if it paid interest annually? Whatwould be the value of this bond if it paid interestsemiannually?

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4.4 Ratings (585 Votes)
1Information provided Par value future value 1000 Time 12 years Coupon rate 11 Coupon payment 0111000 110 Yield to maturity 18 The price of the bond is calculated by computing the present    See Answer
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A bond that matures in 12 years has a $1,000 par value. Theannual coupon interest rate is 11 percent and the market's requiredyield to maturity on a comparable-risk bond is 18 percent. Whatwould be the value of this bond if it paid interest annually? Whatwould be the value of this bond if it paid interestsemiannually?

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