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QUESTION
What is the value of a bond that matures in 7 years, has an annual coupon payment of $120 and a par value of $1000?
What is the value of a bond that matures in 7 years, has an annual coupon payment of $120 and a par value of $1000? Assume a required rate of return 12%.1. $9702. $1,3303. $3304. $1,000
Year1234567 Cash Flow PV factor @12% PV1200.891200.801200.711200.641200.571200.5111200.45Total of PV 107.1495.6685.4176.2668.0960.80506.631000 Therefore we select the...