Question
A bond has a $1,000 par value, 11 years to maturity, and pays a coupon of 6.75% per year, annually. You expect the bonds yield
A bond has a $1,000 par value, 11 years to maturity, and pays a coupon of 6.75% per year, annually. You expect the bonds yield to maturity to be 6.0% per year in four years.If you plan to buy the bond today and sell it in four years, what is the most that you can pay for the bond and still earn at least a 10.0% per year return on your investment?
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
8th edition
77861620, 978-0077861629
