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(8) A company issues $100k worth of bonds to fund the construction of a new building. The bonds pay $7K per annually at the end
(8) A company issues $100k worth of bonds to fund the construction of a new building. The bonds pay $7K per annually at the end of each year for the next 10 years. At the end of the 10th year the company also pays the lender back the $100k: (a) What is the interest rate the company is paying on the bonds? (b) The moment after the $100k of bonds issues the company announces it has lost a big account. The $100k worth of bonds are trading on the open market. For this reason, their value drops from $100k to $81.6k. What is the interest rate the bonds are now paying
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