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A bond has the following features: Coupon rate of interest: 5 percent Principal: $1,000 Term to maturity:10 years a. What will the holder receive when

A bond has the following features:

Coupon rate of interest: 5 percent

Principal: $1,000

Term to maturity:10 years

a. What will the holder receive when the bond matures?

b. 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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