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per-share option fn You have just learned...

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Finance

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option fn You have just learned about a bond about to be issued by NOP Inc. that has the prope risk characteristics for your portfolio. The bond has a par value of $1,000, fifteen year to maturity, a 9% coupon, and pays interest semiannually. a) If your cost of capital is 12%, what is themaximum price you should pay for the 6. bond? ew Buetnb) You purchased the bond described above at its fair market price (from part a) when it was issued. That was ten years ago. You just received the twentieth interest payment Bonds of this quality are currently being priced to yield 10%. You put all of your interest payments in your savings account which paid 4% compounded semiannually for the first four years and 2% compounded semiannually for the last six years. If you sell the bond right now at its fair market price, what will be your holding period yield on the investment

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