Question: Diamond Corporation is planning a bond issue with an escalating coupon rate. The annual co upon rate will be 4% for the first 3 years,

Diamond Corporation is planning a bond issue with an escalating coupon rate. The annual co upon rate will be 4% for the first 3 years, 5% for the subsequent 3 years, and 6% for the final 3 years. If bonds of t his risk are yielding 5%, estimate t he bond's current price.

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