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2 0 year AAA - rated bonds pay 7 % semi - annual coupons on $ 1 , 0 0 0 par values. The current

20

year AAA

-

rated bonds pay

7 %

semi

-

annual coupons on $

1, 000

par values. The current cost of debt is

6.26 %

based on semi

-

annual compounding. What is the bond's current fair price?

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