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A bond has the following features: Coupon rate of interest: 5 percent Principal: $ 1 , 0 0 0 Term to maturity: 1 0 years

A bond has the following features:

Coupon rate of interest:

5

percent

Principal: $

1, 000

Term to maturity:

10

years

What will the holder receive when the bond matures?

If the current rate of interest on comparable debt is

8

percent, what should be the price of this bond? Would you expect the firm to call this bond? Why?

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