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5. A bond is purchased on January 15,2021 at a $1,000.00 par value and a coupon of $80.00. It is a 10 year (to maturity)
5. A bond is purchased on January 15,2021 at a $1,000.00 par value and a coupon of $80.00. It is a 10 year (to maturity) bond. One year after the bond is issued, on January 15,2022 , the going rate for bonds in the market is set at 10.00% on this date. [16 Points] A. What type of bond is this on January 15,2022 ? B. What is the value of this bond at the end of the first year? 6. A stock pays a dividend of $10.00 per share every year. The required return in the market is 20%. What is the value of the stock? [12 points]
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