Flora Co.'s bonds, maturing in 18 years, pay 12 percent interest on a $1,000 face value....

 

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Flora Co.'s bonds, maturing in 18 years, pay 12 percent interest on a $1,000 face value. However, interest is paid semiannually. If your required rate of return is 11 percent, what is the value of the bond? How would your answer change if the interest were paid annually? Flora Co.'s bonds, maturing in 18 years, pay 12 percent interest on a $1,000 face value. However, interest is paid semiannually. If your required rate of return is 11 percent, what is the value of the bond? How would your answer change if the interest were paid annually?

Answer rating: 100% (QA)

To calculate the value of the bond we can use the present value formula for a bond PV C 1 rnnt F 1 r... View the full answer