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3) Debenture of Wal-Mart pays an annual coupon of 12%. It has 6 years left to maturity. The face value is $1000. If the current
3) Debenture of Wal-Mart pays an annual coupon of 12%. It has 6 years left to maturity. The face value is $1000. If the current required rate of return is 16%...
. i. Without doing any calculations would you expect Wal-Marts debenture to increase or decrease in value with time, everything else remaining the same?
ii. Under what market conditions would this debenture sell at premium?
iii. If there is a sudden decline in market interest rates such that required rate falls to 10% what will be the percent change in the value of Wal-Marts debentures?
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